An Account Is Often Referred to as a T-Account Because

question 149

True/False

An account is often referred to as a T-account because of the way it is constructed.

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Definitions:

Retained Earnings

The sum of a company's earnings up to the present, reduced by any shareholder dividends or distributions.

Total Assets

The sum of all assets owned by a company, including both current and fixed assets, as represented on the balance sheet.

Dividends

Disbursements issued by a company to its shareholders, usually sourced from the organization's earnings.

Income Summary

A temporary account used to transfer the revenues and expenses for an accounting period to the Retained Earnings account.