petrussell
Jan 20, 2012, 08:56 AM
Eventually as revenue increses, owners equity will_____________-
petrussell
Jan 20, 2012, 08:58 AM
As expense increaseowner's equity wll eventually ____
pready
Jan 20, 2012, 10:04 AM
Revenues - Expenses = Net Income
Net Income - Cash Dividends is added to Owners Equity as Retained Earnings at the end of an accounting period.
Therefore an increase in revenues and or a decrease in expenses increases Net Income, which in turn increases Retained Earnings and ultimately increases Owners Equity.