Question

Wald Corporation's adjusted trial balance shows the following temporary accounts: service revenue: $20,000; salaries expense $8,000; insurance expense: $2,000; utilities expense: $3,000; interest expense $200; and depreciation expense: $1,400. As part of the the closing process, Wald should credit retained earnings for:

Answer 1

Wald corporations should credit reatined earnings  as $20,000 credited as revenue balance.

What is retained earning?

After paying all direct and indirect costs, income taxes, and dividends to shareholders, a company's profitability ratios are the amount of profit left over.

This is the part of the statement of financial position that can be utilized to invest in new equipment, research and development, and marketing, for example.

Revenues will enhance the retained profits balance, while expenses will lower it the reason behind this is they both come under the Income statement.

Therefore, retained earnings are considered as profitable income of the organization it is credited as revenue balance in the financial statement.

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