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krok68 [10]
3 years ago
9

Can you breifly explain why stockholders' investment and revenues increase stockholders' equity, while dividends and expenses de

crease stockholders' equity.
Business
1 answer:
Scilla [17]3 years ago
5 0
From an accounting standpoint, stockholders' investment and revenues increase the assets of the company without adding to the liabilities. Therefore according to the equation (A = L + E), equity must increase.

Similarly, issuing dividends and paying expenses pays cash out of the company, which decreases assets without changing liabilities. Therefore equity must decrease.

Another way to think of it is: what contributes to the company's profit and/or value, and what decreases these things? Well, revenues and people investing in the company are good (and therefore good for stockholders), and giving cash out and paying expenses are costs to the company (and therefore decrease value for stockholders).
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3 years ago
Assume that a speculator purchases a put option on British pounds (with a strike price of $1.50) for $.05 per unit. A pound opti
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Answer:

The highest net loss of $1,562.50 (i.e. – $1,562.50)

Explanation:

This can be calculated using the following equation:

Highest net profit possible = British pounds put option price per unit × Units of the pound option

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However, based on the information provided in the question, the option will not be exercised and this will result into the highest net loss of $1,562.50 (i.e. – $1,562.50).

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3 years ago
What are renewable energy sources?
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3 years ago
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In the Keynesian-cross model, fiscal policy has a multiplied effect on income because fiscal policy: changes income, which chang
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Answer:

Changes income, which changes consumption, which further changes income

Explanation:

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3 years ago
If a school keeps two lists, one for student registration and one for student financial information, both containing name and ad
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Answer: Redundancy

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  The data redundancy is one of the type of condition in the database where we can easily store our data or information in more than two different places in the computer system memory. It is basically helps in correcting and also detecting the different types of errors in the stored data.

According to the given question, the school is basically keeping the two different list but the address and the name of the student information are similar and this is refers as data redundancy.  

 Therefore, Redundancy us the correct answer.

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3 years ago
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