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Unformatted text preview: Revenue and Expenses are CLOSED OUT at the end of every period. Revenue and Expenses are closed to RETAINED EARNINGS. 4. Differentiate between the Income Statement and Balance Sheet, and describe the major components of these two financial statements. Income statement-Revenue- expenses = net earnings-Comes from scratch paper used to keep the accounting equation in balance during the period Balance sheet-prepared after closing-assets= liabilities + equity Income statement Company Date ending date of that period Balance sheet As of...
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- Fall '11
- Financial Accounting