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Thus, the amount of the dividens is not included in the computation of income. A lliability account, Dividens Payable, comes into existence, when the dividend is declared and is discharged when the dividend is paid.
Journal: In an actual accounting system, transactions are initially recorded in the journal and is later transferred to the general ledger. It is a day-by-day record of business transactions.
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Net income: Difference between revenue and expenses. Increase in owners?equity profits of the business
Retained earnings: the rest of the net income which is left for company?s usage...
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