Financial Act Demonsration Problem #1

Is not an expense of the business because it is not

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Unformatted text preview: l out of the business. For a corporation, this would be considered a dividend. Cash is decreasing, but the equity in the business will also decrease. Rules: Decreases to equity accounts are debited, decreases to asset accounts are credited. Journal entry: Debit to Retained Earnings and Credit to Cash Dr. Jan 31 Retained Earnings (withdrawals) Cash 4. Cr. 500 500 Post to the general ledger:. Cash 1/1 10,000 1/2 800 1/4 750 1/25 150 \1/31 500 Retained Earnings 1/31 500 If no other transactions occurred during the month, what would the income statement look like? What would the balance sheet look like? The Statement of Cash Flows?...
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