Parrish 1-2 (Accounts on Statement(s) )This is a problem in my workbook.  It asks what accounts appear on what statement or statements.  I have once or twice received the wrong answer for a question.  I just ask that you be certain about your answer so it will help me have a better understanding.  The workbook does say that the accounts may appear on more than one financial statement.1) Net Income 2) End of period retained earnings balance3) Net decrease in cash4) Depreciation expense5) End of period cash balance6) Beginning of Period retained earnings balance

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Asked Jan 18, 2020
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Parrish 1-2 (Accounts on Statement(s) )

This is a problem in my workbook.  It asks what accounts appear on what statement or statements.  I have once or twice received the wrong answer for a question.  I just ask that you be certain about your answer so it will help me have a better understanding.  The workbook does say that the accounts may appear on more than one financial statement.

1) Net Income 

2) End of period retained earnings balance

3) Net decrease in cash

4) Depreciation expense

5) End of period cash balance

6) Beginning of Period retained earnings balance

 

 

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Expert Answer

Step 1

Net income is the amount obtained after deducting all the relevant expenses, taxes and interest from the revenue of an entity. It is a line item on the income statement. Further, it is added in the capital on the balance sheet of an entity. It is also shown under the operating activities in the cash flow statement. Lastly, it is also added in the opening retained earnings in the statement of retained earnings for the computation of closing retained earnings.

On the whole, it is to be shown in the statement of income, B/S, cash flow statement and statement of owners' equity.

 

Step 2

Retained earnings ending balance appears on the balance sheet under the equity head as well as on the statement of retained earnings. The statement of retained earnings is prepared to arrive at the closing balance of the retained earnings as on the balance sheet date

Step 3

A net decrease in cash appears on the cash flow statement only. A statement prepared after the ...

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