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Q. Assets and capital stock accounts?
At the present extend the liabilities, assets and capital stock accounts in the Adjusted Trial Balance columns to the Balance Sheet columns. Extend asset sum as debits and liability and capital stock amounts as credits.
Note that the ending retained earnings sum determined in the Statement of Retained Earnings columns appears again as a credit in the Balance Sheet columns. The ending retained earnings sum is a debit in the Statement of Retained Earnings columns to balance the Statement of Retained Earnings columns. The ending retained income is a credit in the Balance Sheet columns because it increases stockholders' equity and increases in stockholders' equity are credits. Retained earnings would have a debit ending balance merely if cumulative losses and dividends exceed cumulative earnings. With the insertion of the ending retained earnings amount, the Balance Sheet columns balance.
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