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
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When expenses exceed revenues in a given period,
a.
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 revenues
and expenses
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- A decrease in economic benefits or decrease in assets or increase in liability resulting in decrease in equity is termed as. a. Capital b. Income c. Expense d. LiabilityExplain why stockholders’ equity is increased by revenuesand decreased by expenses.Which of the following regarding retained earnings is false?a. Retained earnings is increased by net income.b. Retained earnings is a component of stockholders’equity on the balance sheet.c. Retained earnings is an asset on the balance sheet.d. Retained earnings represents earnings not distributed tostockholders in the form of dividends
- The net effect of the entries to recognize the write-off under the allowance method is to: Multiple Choice have no effect on total assets or stockholders' equity. increase total stockholders' equity only. increase total assets and stockholders' equity. decrease total assets.A restriction on retained earningsa. Reduces retained earnings available for the declaration of dividends. b. Can be reported by an entry appropriating retained earnings. c. Has no effect on total retained earnings. d. All of the choices are correct.Which of the statements below is false? If the net income of prior period is overstated because of the change in accounting policy, the effect is (A) deducted from the beginning retained earnings. Prior period errors are shown as adjustment of the ending balance of retained earnings. If the net income of (B) the prior period is overstated, the amount of the error uis deducted from retained earnings. Equity is also the net assets. In the conversion of preference chares into ordinary shares, if the total par or stated value of the ordinary D shares is more than the original issue of the preference shares, the difference is charged to retained earnings.
- If the allowance method is used, how does recording the recovery of an uncollectible account affect the elements of the financial statements? (Hint: Consider the effect of both the reinstatement and the collection of the receivable taken together.) Multiple Choice Increase stockholders' equity Increase total assets and stockholders' equity Decrease total assets No effect on total assets or stockholders' equityPerforming services on account: increases assets and decreases stockholders' equity. decreases revenues and decreases stockholders' equity. O decreases both assets and liabilities. O decreases assets and increases stockholders' equity increases both net income and stockholders' equity.When total sharcholders' equity has a negative balance, it is described in financial statement as O loss O capital deficiency liability