Debit Credit Retained Earnings Cash 15,000 15,000 Common stock 15,000 Accts Rece
ID: 2447031 • Letter: D
Question
Debit Credit Retained Earnings
Cash 15,000 15,000
Common stock 15,000
Accts Receivable 48,000
Revenue 48,000 48,000
Utility Expense 1,250 -1,250
Cash 1,250
Cash 36,000 0
AcctsReceivable 36,000
Accrued Salaries 8,000 -8,000
AcctsPayable 8,000
Cash Dividend 1,000 -1,000
CashDividend 1,000
Total RetainedEarnings 52,750
Explanation / Answer
The amount of Net income is different form net cash flowfrom operating activities because The cash flowstatement includes only inflows and outflows of cash and cashequivalents; it excludes transactions that do not directly affectcash receipts and payments. These noncash transactions includedepreciation or write-offs on bad debts to name a few. The cashflow statement is a cash basis report on three types of financialactivities: operating activities, investing activities, andfinancing activities. Noncash activities are usually reported infootnotes. On other side net income includes both cash and accrualrevenue and expenses