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5 April, 13:55

The net increase or decrease in Retained Earnings for a period is recorded by closing entries.

True or False

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  1. 5 April, 14:14
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    Answer: True

    Explanation: The retained earnings are recorded after closing the accounts of the income statement, the surplus called profit or the missing called loss is transferred to equity through the non-distributed profit item.

    This undistributed profit account also closes during the accounting period, to clarify how much was generated in a period, they are not like the balance sheet accounts that are cumulative.
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