1. Using a spreadsheet with the indirect method, entry (a) records net income as the first item on the spreadsheet in the Operating Activities section, with the corresponding entry as a debit to Retained Earnings. credit to Retained Earnings. credit to Income Summary. debit to Cash.
1. Using a spreadsheet with the indirect method, entry (a) records net income as the first item on the spreadsheet in the Operating Activities section, with the corresponding entry as a debit to Retained Earnings. credit to Retained Earnings. credit to Income Summary. debit to Cash.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Using a spreadsheet with the indirect method, entry (a) records net income as the first item on the spreadsheet in the Operating Activities section, with the corresponding entry as a
- debit to
Retained Earnings . - credit to Retained Earnings.
- credit to Income Summary.
- debit to Cash.
2. As you complete the spreadsheet to account for all the changes in the noncash accounts that occurred during the current period, you are
- constructing entries that will need to be journalized and posted when the spreadsheet is complete.
- reconstructing the
journal entries that caused the changes in the noncash accounts. - undoing the journal entries that caused the changes in the noncash accounts.
- doing none of these choices.
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