In the Statement of Cash Flows, Retained Earnings Are Handled

question 153

Multiple Choice

In the statement of cash flows, retained earnings are handled through the adjustment of which two accounts?

• A) Revenue and cost.
• B) Assets and liabilities.
• C) Depreciation and purchases.
• D) Net profits and dividends.

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Definitions:

Acceptor

A drawee of a draft who has promised to honor the draft as presented by signing it on its face.

Draft

A written order by which the party creating it orders another party to pay money to a third party. Also called bill of exchange.

Instrument

A formal legal document that serves as evidence of a fact, act, or obligation, such as a deed, will, or contract.

Insane

A term describing severe mental illness or insanity, legally signifying inability to understand or control one's actions.