Retained earnings shows the cumulative income of the

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Retained earningsShows the cumulative income of the company less the amounts distributed to the owners in the form of dividends.Salaries payableAmounts owed to employees for services rendered.Sales taxes payableAre taxes a company has collected from customers but has not remitted to the taxing authority, usually the state.Stockholders' equityShows the owners' interest (equity) in the business.Taxes withheld from employeesItems such as federal income taxes, state income taxes, and social security taxes withheld from employees' paychecks.Unclassified balance sheetA balance sheet showing only three major categories: assets, liabilities, and stockholders' equity.Unearned revenues (revenues received in advance)Result when payment is received for goods or services before revenue has been earned.Work sheetA columnar sheet of paper on which accountants have summarized information needed to make the adjusting and closing entries and to prepare the financial statements.*Some of these terms have been defined in earlier chapters but are included here for yourconvenience.Ch. 5 True-falseAt the end of the accounting period, three trial balances are prepared.
The amounts in the Adjustments columns are always added to the amounts in the Trial Balance columns to determine the amounts in the Adjusted Trial Balance columns.False.If a debit-balance account (such as Prepaid Rent) is credited in the adjustment, the amountin the Adjustments columns is deducted from the amount in the Trial Balance columns to determinethe amount for that item in the Adjusted Trial Balance columns.If a net loss occurs, it appears in the Income Statement credit column and Statement of Retained Earnings debit column.
After the closing process is complete, no balance can exist in any revenue, expense, Dividends, or IncomeSummary account.

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