How does earnings revenue affect the accounting equation?
Revenue increases the asset side of the accounting equation and also increases the retained earnings account in the stockholders' equity section of the equation.
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Accounting
- The language of business
- What type of income or profit does an investor expect to receive in exchange for providing financial resources? What time of income does a creditor expect from providing financial resources to an organization or business?
- Describe a non-for-profit or nonprofit enterprise. What is the motivation for this type of entity?
- Distinguish between elements of financial statements and accounts.
- What role do assets play in business profitability?
- To whom do the assets of a business belong?
- Describe the differences between creditors and investors.
- Name the accounting term used to describe a business's obligations to creditors.
- What is the accounting equation? Describe each of its three components.
- Who ultimately bears the risk and collects the rewards associated with operating a business?
- What does a double-entry bookkeeping system mean?
- How does acquiring capital from owners affect the accounting equation?
- What is the difference between assets that are acquired by issuing common stock and those that are acquired by using retained earnings?
- What are the three primary sources of assets?
- What is the source of retained earnings?
- How does distributing assets (paying dividends) to owners affect the accounting equation?
- What are the similarities and differences between the dividends and the expenses?
- What four general-purpose financial statements do business enterprises use?
- Which of the general-purpose financial statements provides information about the enterprise at a specific designated date?
- What causes a net loss?
- How are asset accounts usually arranged in the balance sheet?
- How do temporary accounts differ from permanent accounts? Name three temporary accounts. Is retained earnings a temporary or a permanent account?
- What is the historical cost concept and how does it relate to verifiability?
- Which of the general-purpose financial statements provides information about the enterprise at a specific designated date?