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Mr.Remick asks 9-year-old Anne to divide a pitcher of lemonade equally between two glasses, one each for her and her friend Kate.The two glasses are different shapes, with Anne's being tall and thin and Kate's being short and wide.After Anne pours the lemonade, Mr.Remick says to her, "Look, the lemonade in your glass is higher than the lemonade in Kate's glass.Did you give yourself more than you gave Kate?" "No," Anne replies, "my glass is skinnier." Mr.Remick continues to ask Anne questions to determine how well she understands that height compensates for width in this situation.Mr.Remick's strategy can best be described as illustrating:
Retained Earnings
Earnings not paid out as dividends but instead reinvested in the company or used to pay off debt.
Total Assets
The combined value of everything a company owns, both current and non-current, as reported in the balance sheet.
Total Revenues
The total amount of income generated by the sale of goods or services before any expenses are subtracted.
Reversing Entries
These are journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous accounting period.
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