Question

In: Accounting

The major difference in the statement of retained earnings between a service business and a merchandising business is

The major difference in the statement of retained earnings between a service business and a merchandising business is

that the retained earnings statement of a merchandisi business shows the Cost of Goods Sold.

B) that the retained earnings statement of a merchandising business includes Dividends.

C) nothing. There are no differences between the two.

D) that the retained earnings statement of a service business includes Dividends.

Solutions

Expert Solution

The option (c) is right option.

 

Explanation:

Retained Earnings shows the statement of net profits after the dividends are paid to shareholders irrespective of the type of business. The difference between service and merchandise business howevers happens on the asset side and not the retained earnings side.

Hence, (c) is right option.

Hence, (c) is right option.

Umair answered 1 year ago
Next > < Previous

Related Solutions

Statement of retained earnings :
Rolt Company began 2019 with a $105,000 balance in retained earnings. During the year, the following events occurred: 1.   The company earned net income of $86,000. 2.   A material error in net income from a previous period was corrected. This error correction increased retained earnings by $9,590 after related income taxes of $4,110. 3.   Cash dividends totaling $12,000 and stock dividends totaling $18,500 were declared. 4.   One thousand shares of callable preferred stock that originally had been issued at $115...
Statement of retained earnings
Statement of retained earnings
why is the statement of retained earnings the connecting link between in the incime statement and...
why is the statement of retained earnings the connecting link between in the incime statement and the balance sheet ?
income statement and retained earnings statement
Misclassifcations Roz Corporation's Multiple-Step income statement and retained earnings statement for the year ended December 31, 2019 as developed by its bookkeeper are shown here: Revenue StatementDecember 31, 2019   Sales (net)     $179,000 Plus: Income from operations of discontinued Division P (net of $960 income taxes)     2,240 Less: Dividends declared ($1.50 per common share)     (7,500) Net revenues     $173,740 Less: Selling expenses     (19,000) Gross profit     $154,740 Less Operating expenses:       Interest expense $4,100     Loss on sale of Division P (net of $1,200 income...
Explain the connection between the income statement, the retained earnings statement and the balance sheet.
Explain the connection between the income statement, the retained earnings statement and the balance sheet.
1. What is the connection between the income statement, statement of financial position, retained earnings statement...
1. What is the connection between the income statement, statement of financial position, retained earnings statement and statement of cash flows?
The statement of retained earnings should be prepared
The statement of retained earnings should be prepared before the income statement and after the balance sheet after the income statement and before the balance sheet after the income statement and balance sheet before the income statement and balance sheet
The statement of stockholder's equity differs from the statement of retained earnings in that the statement...
The statement of stockholder's equity differs from the statement of retained earnings in that the statement of stockholders' equity: a. shows the effect of dividends declared. b. contains net income. c. contains the changes in contributed capital. d. contains a liability section.
Describe the difference between a service and merchandising firm. Give an example of each from publicly...
Describe the difference between a service and merchandising firm. Give an example of each from publicly traded companies. Give a detailed example of the recording of purchases under a perpetual inventory system including returns, allowances and discounts. Give a detailed example of the recording sales revenues under a perpetual inventory system including returns, allowances and discounts. Give a detailed example of the recording of purchases under a periodic inventory system including returns, allowances and discounts. Give a detailed example of...
Describe the difference between a service and merchandising firm. Give an example of each from publicly...
Describe the difference between a service and merchandising firm. Give an example of each from publicly traded companies. Give a detailed example of the recording of purchases under a perpetual inventory system including returns, allowances and discounts. Give a detailed example of the recording sales revenues under a perpetual inventory system including returns, allowances and discounts. Give a detailed example of the recording of purchases under a periodic inventory system including returns, allowances and discounts. Give a detailed example of...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT