The amount of retained earnings has a direct bearing with a firm’s capability of distributing dividends to the shareholders. If a company has retained a lot of earnings then it can pay a portion of such earnings to the shareholders in form of dividends. On the other hand, if the figure realized from retained earnings is low or negative it means t…[Read more]

A T-account is the basic tool used in accounting to keep record of the transactions that takes place. This is a tool which gets its name from its ‘T’ shape: the left side of the ‘T’ for debits, the right side for credits. It is necessary to understand that T-account reflects certain account, for instance, cash account, accounts payable or sales a…[Read more]