Expenses are increased with: A. Debits because they decrease stockholders' equity B. Credits because they decrease stockholders' equity C. Credits because they increase stockholders' equity D. Debits because they increase stockholders' equity

Expenses are increased with: A. Debits because they decrease stockholders' equity B. Credits because they decrease stockholders' equity C. Credits because they increase stockholders' equity D. Debits because they increase stockholders' equity

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 5MCQ

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Question

Expenses are increased with:

A. Debits because they decrease stockholders' equity

B. Credits because they decrease stockholders' equity

C. Credits because they increase stockholders' equity

D. Debits because they increase stockholders' equity

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

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Effects of transactions on stockholders’ equity Indicate whether each of the following types of transactions will (a) increase stockholders’ equity or (b) decrease stockholders’ equity. a. Issued common stock for cash. l. Received cash for fees earned. c. Paid cash for utilities expense. d. Paid cash for rent expense. e. Paid cash dividends.
Revenues are increased with: A. Debits because they decrease stockholder's equity B. Credits because they decrease stockholder's equity C. Credits because they increase stockholder's equity D. Debits because they increase stockholder's equity
When expenses exceed revenues in a given period,a. Stockholders’ equity will not be impacted.b. Stockholders’ equity will be increased.c. Stockholders’ equity will be decreased.d. One cannot determine the impact on stockholders’equity without information about the specific revenuesand expenses
Explain why stockholders’ equity is increased by revenuesand decreased by expenses.
The increases in stockholders' equity attributable to selling services or products to customers are called a.liabilities b.revenues c.expenses d.assets
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The effects of paying salaries for the current period are to:a. increase assets and increase stock- holders' equity.b. increase assets and increase liabilities.c. decrease assets and decrease liabilities.d. decrease assets and decrease stock- holders' equity.
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