Asked by Daniel Volante on Jul 15, 2024
Verified
Transactions affecting stockholders' equity include
A) stockholder investments and payment of liabilities
B) stockholder investments, dividends, earning of revenues, and incurrence of expenses
C) stockholder investments, earning of revenues, incurrence of expenses, and collection of accounts receivable
D) stockholder dividends, earning of revenues, incurrence of expenses, and purchase of supplies on account
Stockholders' Equity
The residual interest in the assets of a corporation that remains after deducting its liabilities, often referred to as shareholders' equity.
Dividends
Funds disbursed by a corporation to its shareholders, often derived from the corporation's earnings.
Revenues
The income generated from normal business operations, typically from the sale of goods and services to customers.
- Recognize and distinguish the different kinds of transactions and their influences on the accounting equation.
Verified Answer
AR
Antonette Riley-SaxtonJul 20, 2024
Final Answer :
B
Explanation :
Stockholder investments increase stockholders' equity, dividends decrease it, and earning of revenues and incurrence of expenses affect the net income, which in turn affects the retained earnings component of stockholders' equity.
Learning Objectives
- Recognize and distinguish the different kinds of transactions and their influences on the accounting equation.