Question

Which of the following is true regarding the flow of information from the adjusted trial balance on the end-of-period spreadsheet?

a. The retained earnings and dividends account balances flow into the balance sheet.

b. The asset and liability account balances flow into the retained earnings statement.

c. The revenue and expense account balances flow into the retained earnings statement.

d. The revenue and expense account balances flow into the income statement.

Answer 1

a. The retained earnings and dividends account balances flow into the balance sheet. (this statement is false, Dividends and retained earnings statement flow in to the retained earnings statement)

b. The asset and liability account balances flow into the retained earnings statement. (This statement is false, asset and liability balances flow in to the balance sheet}

c. The revenue and expense account balances flow into the retained earnings statement. (This statement is false revenue and expenses flow in to the income statement only)

d. The revenue and expense account balances flow into the income statement. ( this statement is true , revenue and expenses account flow in to the income statement)