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How is stockholder's equity increased by revenues and decreased by expenses?
Wiki User
∙ 11y ago
Briefly explain why the owner's investment and revenues increased owner's equity, while withdrawals and expenses decreased owner's equity
Wiki User
∙ 11y ago
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What is an expanded basic accounting equation?
The expanded accounting equation replaces Owner's Equityin the basic accounting equation (Assets = Liabilities + Owner's Equity) with the following components: Owner's Capital + Revenues - Expenses - Owner's Draws. In other words, the expanded accounting equation for a sole proprietorship is: Assets = Liabilities + Owner's Capital + Revenues - Expenses - Owner's Draws.In the expanded accounting equation for a corporation, Stockholders' Equity in the basic accounting equation (Assets = Liabilities + Stockholders' Equity) is replaced by these components: Paid-in Capital + Revenues - Expenses - Dividends - Treasury Stock. The resulting expanded accounting equation for a corporation is: Assets = Liabilities + Paid-in Capital + Revenues - Expenses - Dividends - Treasury Stock.The expanded accounting equation allows you to see separately (1) the impact on equity from net income (increased by revenues, decreased by expenses), and (2) the effect of transactions with owners (draws, dividends, sale or purchase of ownership interest).
Expanded accounting equation?
Assets =Liabilities +(Stockholders' Equity=Paid-in Capital + Revenues - Expenses - Dividends - Treasury Stock. )Assets =Liabilities +(Owner's Equity=Owner's Capital + Revenues - Expenses - Owner's Draws.)
What occurs when expenses exceed revenues for a given accounting period?
Retained earnings are decreased.
Do Revenues represent decreases in stockholders' equity?
no, they represent increases in stockholders' equity.
What balances have debit or credit balances?
Assets, Expenses and Losses have native debit balances. Liabilities, Stockholders' equity, Revenues, and Gains have native credit balances.
What balances have debit or credit balance?
Assets, Expenses and Losses have native debit balances. Liabilities, Stockholders' equity, Revenues, and Gains have native credit balances.
Prepaid expenses depreciation accrued expenses unearned revenues and accrued revenues are all examples of?
Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of
Matching revenues and expenses refers to?
Matching revenues and expenses is called "Matching concept" of Accounting.
Are revenues the same as net income?
Revenues are earnings from sales of products and net income is the difference between revenues and expenses.
What is on an income statement?
revenues and expenses
What effect do revenues and expenses have on retained earnings?
Revenues Increase and Expense Decreases.
What is the appropriate order for a company's chart of accounts?
assets, liabilities, stockholders' equity, revenues, expense
