Fund. of Financial Accounting - With Access
5th Edition
ISBN: 9781259636240
Author: PHILLIPS
Publisher: MCG
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Textbook Question
Chapter 3, Problem 8Q
Explain why stockholders’ equity is increased by revenues and decreased by expenses.
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Check out a sample textbook solutionStudents have asked these similar questions
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
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
Chapter 3 Solutions
Fund. of Financial Accounting - With Access
Ch. 3 - Prob. 1QCh. 3 - When accounting was developed in the 14th and 15th...Ch. 3 - Define accrual basis accounting and contrast it...Ch. 3 - Prob. 4QCh. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Explain the expense recognition principle...Ch. 3 - Explain why stockholders equity is increased by...Ch. 3 - Explain why revenues are recorded as credits and...Ch. 3 - Complete the following table by entering either...
Ch. 3 - Complete the following table by entering either...Ch. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - What is the difference between Accounts Receivable...Ch. 3 - What is the difference between Accounts Payable...Ch. 3 - For each of the following situations, indicate...Ch. 3 - Prob. 17QCh. 3 - Which of the following items is not a specific...Ch. 3 - Prob. 2MCCh. 3 - Prob. 3MCCh. 3 - Prob. 4MCCh. 3 - If a company incorrectly records a payment as an...Ch. 3 - Prob. 6MCCh. 3 - Prob. 7MCCh. 3 - Prob. 8MCCh. 3 - Webby Corporation reported the following amounts...Ch. 3 - Prob. 10MCCh. 3 - Prob. 3.1MECh. 3 - Identifying Accrual Basis Revenues The following...Ch. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Recording Accrual Basis Revenues For each of the...Ch. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 3.6MECh. 3 - Prob. 3.7MECh. 3 - Prob. 3.8MECh. 3 - Prob. 3.9MECh. 3 - Identifying Accrual Basis Expenses The following...Ch. 3 - Prob. 3.11MECh. 3 - Recording Accrual Basis Expenses For each of the...Ch. 3 - Prob. 3.13MECh. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Preparing Accrual Basis Journal Entries for...Ch. 3 - Prob. 3.16MECh. 3 - Determining the Accounting Equation Effects of...Ch. 3 - Prob. 3.18MECh. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Preparing Financial Statements from a Trial...Ch. 3 - Preparing an Income Statement and Calculating Net...Ch. 3 - Prob. 3.22MECh. 3 - Calculating and Interpreting Net Profit Margin...Ch. 3 - Prob. 3.1ECh. 3 - Matching Definitions with Terms Match each...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Revenues According to...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Identifying Accrual Basis Expenses Under accrual...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Determining Accounting Equation Effects and Net...Ch. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Prob. 3.10ECh. 3 - Recording Journal Entries and Determining Net...Ch. 3 - Recording and Posting Accrual Basis Journal...Ch. 3 - Prob. 3.13ECh. 3 - Analyzing Transactions from the Perspectives of...Ch. 3 - Prob. 3.15ECh. 3 - Determining Accounting Equation Effects of Several...Ch. 3 - Preparing Journal Entries For each of the...Ch. 3 - Prob. 3.18ECh. 3 - Creating an Unadjusted Trial Balance Based on the...Ch. 3 - Inferring Transactions, Creating Financial...Ch. 3 - Determining the Effects of Various Transactions EZ...Ch. 3 - COACHED PROBLEMS Recording Nonquantitative Journal...Ch. 3 - Prob. 3.2CPCh. 3 - Prob. 3.3CPCh. 3 - Prob. 3.4CPCh. 3 - Prob. 3.1PACh. 3 - Recording Journal Entries Diana Mark is the...Ch. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Prob. 3.4PACh. 3 - Prob. 3.1PBCh. 3 - Prob. 3.2PBCh. 3 - Analyzing the Effects of Transactions Using...Ch. 3 - Analyzing, Journalizing, and Interpreting Business...Ch. 3 - Prob. 3.1COPCh. 3 - SKIL_S DEVELOPMENT CASES Finding Financial...Ch. 3 - Prob. 3.2SDCCh. 3 - Prob. 3.4SDCCh. 3 - Ethical Decision Making: A Mini-Case Mike Lynch is...Ch. 3 - Accounting for Business Operations Starting in...
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- What is the impact on the accounting equation when stock is issued, in exchange for assets? A. both sides increase B. both sides decrease C. only the Asset side changes D. neither side changesarrow_forwardName the two main components of stockholders; equity. Describe the main sources of change in each component.arrow_forwardWhen 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 expensesarrow_forward
- 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' equityarrow_forwardThe gross increase in stockholder’s equity attributable to business activities are called: a) Dividends b) Revenues c) Expenses d) Assetsarrow_forwardExplain how the Du Pont system of analysis breaks down return on assets. Also explain how it breaks down return on stockholders’ equity.arrow_forward
- a. How does the return on total assets differ from the return on stockholders’ equity?b. Which ratio is normally higher? Why?arrow_forwardWhen liabilites increase and stock holder equity decreases, what is the total assets? shouldn't it be total liabilites plus total stock holder equity=total assets?arrow_forwardIndicate whether statements regarding dividends is true or false. Cash and stock dividends reduce retained earnings.arrow_forward
- . How does the issuance of common stock affect the accounting equation? a) Increases assets and decreases liabilities b) Increases assets and increases equity c) Increases assets and increases liabilities d) Increases liabilities and decreases equityarrow_forwardHow much did June’s transactions increase or decrease stockholders’ equity?arrow_forwardWhich of the following describes the information reported in the statement of stockholders’ equity? a. Net income for the period calculated as revenues minus expenses.b. Total assets equal total liabilities plus stockholders’ equity.c. Change in stockholders’ equity through changes in common stock and retained earnings.d. Net cash flows from operating, investing, and financing activities.arrow_forward
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