Question

2) Dividends : which statement do these belong in? Are these expenses? or withdrawals which are part of the Retained Earnings Statement only?
3) Please list the main contents/categories of an income statement and a retained earnings statement.
4) Define Current assets and current liabilities.

Answer 1

Answer 2.
Dividend is a part of the earning that is paid to the shareholder and it's known as retained earning and not expense.

Therefore answer would be dividend - whichdrawls which are part of the Retained Earning Statement.

Answer 3.
The main content or the categories which are there in income statement are

1. Revenue: it means the total gross receipts which is basically earned by the company's total selling of its goods and services
2. Expenses: Generally expenses is the cost which is spend on behalf of the company to earn more of gross receipts
3.Gains: gains is the total income earned by the company, through the non-business transactions which includes the selling of company's asset.
4. Losses: Losses are generally the amount of money which has to incurred as the Loss by the company, we can sight a example of selling a car, depreciates the value.

Now we come up with the Retained Earnings, so it is a presentation of the corporate quarterly financial statement and annual financial statement, which is calculated by the company through the Balance Sheet and income statement, cash flow statement and statement of changes which occur in the owner's equity. The company's retained earning will always be calculated first through the retained earning balance statement, and the followed by the net after tax income, which will be added to the retained earning balance, and then to the dividends or owner's withdrawal, which are subtracted from the new outcome. The outcome has all the three component, which is the total retained earning. Therefore the components are Retained earning, Net tax income and Owner's withdrawal.

Answer 4.
Current assets are the assets that any company has and can expect that to be sold or expected to be used which can be a result of standard business operations over the next year. There are different types of current assets which includes the following -

Cash
Cash equivalents
Accounts receivable
Stock inventory
Marketable securities
Pre-paid liabilities

Current liability is a short term financial obligations of a company that arises and are not to be paid within a year or within one normal operating year. Operating cycle is the time taken by any company to purchase inventory and covert it to cash from selling it and this cycle of buying and converting is operating cycle. Paying money to a creditor is an example of current liability.

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