During 2021, Its First Year of Operations, Neko's Bakery Had

question 87

Multiple Choice

During 2021, its first year of operations, Neko's Bakery had revenues of $60,000 and expenses of $35,000.The business paid dividends of $20,000.What is the amount of retained earnings at December 31, 2021?

• A)$0
• B)$5,000 credit
• C)$25,000 credit
• D)$20,000 debit

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Definitions:

Subsidiary Ledger

A detailed set of accounts that supports the main ledger, breaking down specific account transactions, like accounts receivable and payable.

General Ledger Accounts

The comprehensive set of accounts that record all financial transactions of a business, summarized in the general ledger.

Owner's Capital

The amount of equity a business owner has invested in the company, representing the owner's stake or ownership interest.

General Journal

A primary accounting record where all types of financial transactions are initially recorded using the double-entry bookkeeping method.