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zmbutt2006
Mar 25, 2009, 07:55 PM
Question: which transaction has no effect on stockholders equity?


a) Purchase of building on credit.

b) Dividends to stockholders.

c) Net loss/Net profit.

d) Investment in cash by stockholders.
ROLCAM
Mar 25, 2009, 09:28 PM
a) Purchase of building on credit.

b) Dividends to stockholders.

c) Net loss/Net profit.

d) Investment in cash by stockholders.

All four items have effect on equity.

You must remember the expanded
accounting formula.

A - L = Equity and retained earnings.
pready
Mar 26, 2009, 12:04 PM
A. has no affect on Stockholders equity because the journal entry is:
Debit Building for the amount
Credit Accounts Payable for the amount