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-   -   Accounting on stockholders' equity (https://www.askmehelpdesk.com/showthread.php?t=344047)

  • Apr 20, 2009, 07:02 PM
    tzr007
    Accounting on stockholders' equity
    The stockholder's equity is is reduced by revenues, expenses, and dividends... correct?
  • Apr 20, 2009, 08:38 PM
    ROLCAM

    The stockholder's equity is is reduced by revenues, expenses, and dividends... correct?

    First determine what is what!
    1) Equity = credit
    2) Revenues = credit
    3) Expenses = debit
    4) Dividends = debit

    Therefore Equity can only be reduced by debits
    which in your case are:-

    3) Expenses and 4) Dividends.
  • Apr 20, 2009, 11:56 PM
    morgaine300

    Revenues increase equity. That's what companies are in business to do - earn revenues and increase equity. When they're earning, they're increasing worth, not decreasing.

    Even though it's good to learn revenue and expense separately, in reality you'll have these summarized on the income statement as net income. And then net income increased retained earnings. (Or net loss decreases.)

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