212k views
2 votes
Which financial statement (income statement, balance sheet, or retained earnings statement) would contain each of the following accounts?

a. Machinery
b. Legal Expense
c. Retained Earnings?

1 Answer

4 votes

Final answer:

The machinery account would be found in the balance sheet, the legal expense account would be found in the income statement, and the retained earnings account would be found in the retained earnings statement.

Step-by-step explanation:

The machinery account would be found in the balance sheet. The balance sheet provides a snapshot of a company's financial position at a specific point in time and includes assets such as machinery.

The legal expense account would be found in the income statement. The income statement shows a company's revenues, expenses, and net income over a specific period of time, including expenses such as legal fees.

The retained earnings account would be found in the retained earnings statement. The retained earnings statement shows the changes in a company's retained earnings over a specific period of time and includes items such as net income and dividends.

Machinery is an asset and would be listed on the balance sheet.

Legal Expense is an expense incurred during the period being reported and would be found on the income statement.

Retained Earnings represents the cumulative net earnings or profit of a company after paying dividends and would be included in the retained earnings statement, which is often a part of the equity section of the balance sheet or presented as a separate statement.

User James Heald
by
8.6k points