[zmbutt2006]

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]

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]

A. has no affect on Stockholders equity because the journal entry is:
Debit Building for the amount
Credit Accounts Payable for the amount