Week 7 Discussion Question 2 Retained Earnings Assignment

Week 7 give-and-take Question 2 Retained Earnings - Assignment ExampleItems contained in this section are usually complex to various audiences (Greiner, 2002). To prepare a balance sheet that serves its purpose, accountants should make orderly arrangement of items contained in the section according to peoples knowledge. For instance, entries in the section should correspond to easily identifiable items (Weygandt, Kimmel, & Kieso, 2010). Accountants should in like manner refrain from using complex terminologies when creating entries for the section.2. Evaluate what a cumulative button in the retained kale section of a gilds balance sheet might indicate about the fiscal performance in the future, indicating how this may influence decisions made about the company. Provide support for your answer.The retained profit section indicates a companys success through a comparison of its income and expenses. Cumulative loss in the retained earning section indicates poor performance of the company (Greiner, 2002). This implies that the company is not creating sufficient bread profit to cater for its losses. In addition cumulative loses also indicate postponed payments to the companys creditors. This indicates that the company is operating on borrowed credit and, therefore at risk of