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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
Rules: Decreases to equity accounts are debited, decreases to asset accounts are credited.
Journal entry: Debit to Retained Earnings and Credit to Cash
Jan 31 Retained Earnings (withdrawals)
Cash 4. Cr. 500
500 Post to the general ledger:. Cash
1/1 10,000 1/2 800
\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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