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Negative Retained Earnings / Retained Earnings Deficit   If the Retained Earnings Account has a debit balance then it is a negative retained earnings or retained earnings deficit. This is due to accumulated losses suffered by the business in previous accounting period. So, the company is unable to declare Dividend to shareholders / stockholders during the current accounting period. A negative retained earnings is recorded in Stockholder’s Equity Section with the account title “Accumulated Deficit”

Retained Earnings The Account used by a corporation / company to record earnings not yet distributed to stockholders / shareholders during the accounting period is Retained Earnings or Unappropriated Retained Earnings . From this unappropriated retained earnings, the distribution of earnings made to stockholders / shareholders of a corporation / company during the accounting period is Dividend .

Accrued Salaries / Salaried Payable / Outstanding Salaries Recording The Amount Of Salaries Expense / Wages Expense For Employees That Is Not Paid Yet When the employees performed their services during the month but still the payment is not paid to employees, then it creates a Liability ( Accrued Expense ) for the company / corporation to pay to employees for the services performed during the accounting period. In such case, the adjusting entry to record, according to Accrual Basis of Accounting , is shown below: Wages Expense a/c / Salaries Expense a/c  XXX                                                    Wages / Salaries Payable a/c / Outstanding Wages / Salaries a/c  XXX                                                            (Wages / Salaries Due For The Period)

Income Summary Account The name of the Temporary Account that is used to summarize the closing entries for Revenue, Cost and Expenses is Income Summary Account. Income summary account is also closed to Retained Earnings Account after calculating Net Income / Net Loss for the period.

Where Is The Information Obtained To Journalize Closing Entries For Revenue, Cost And Expenses / Closing Entries Column of Worksheet The information obtained for Journalizing Closing Entries for Revenue , Cost and Expenses is existed in the closing entries column of worksheet. Revenue, cost and expenses accounts are closed to Income Summary Account at the end of the accounting period.

Is Used Office Supplies A Real Personal Or A Nominal Account? Used Office Supplies is a Nominal Account i.e., an expense whose benefit is used / consumed by the business during the accounting period. It is shown in Income Statement and treated as an Income Statement Account . Also, used office supplies is closed to Income Summary Account .

Is Unused Office Supplies A Personal Real Or A Nominal Account? Unused Office Supplies / Office Supplies On Hand is a Real Account as it is a Current Asset . Unused office supplies is shown on balance sheet as it is a Balance Sheet Account . It shows that part of office supplies which is not consumed or used by the business during the accounting period.

Financial Statements Are Prepared From Which Columns Of Trial Balance Of Worksheet? The Financial Statements are prepared from Adjusted Trial Balance Columns of Worksheet. It is due to the fact that update balances of Balance Sheet Accounts (Assets & Liabilities ) and Income Statement Accounts (Revenue and Expenses) are obtained from adjusted trial balance columns of worksheet.

The Changes In Owner’s Equity Is Usually Recorded In Which Account When Cash Received From Sales? When Cash is received from Sales , the change in the Owner’s Equity is usually recorded in separate revenue account as sales is a revenue account which is the result of operating activities of the owner of the business. Sales, as a direct revenue, increases owner’s equity, so it has positive impact on owner’s equity. The more the amount of sales revenue increases , the more the amount of owner’s equity increases.