Question

Classify the following items as issuance of stock, dividends, revenues, or expenses. Then indicate whether each item increases or decreases stockholders’ equity. 1. Dividends is ; it stockholders' equity. 2. Rent Revenue is ; it stockholders' equity. 3. Advertising Expense is a(n) ; it stockholders' equity. 4. When stockholders pay cash into the business, it is ; it stockholders' equity.

Answer 1

Answer:

1. Dividends = It will be classified as dividends.

2. Rent Revenue = It will be classified as revenues.

3. Advertising Expense = It will be classified as an expense.

4. Stock holders pay cash into business = It will be classified as Issuance of stock.

Dividends are the share of revenue distributed to stockholders.

Revenues are income earned by the company.

Expense are the outflow of cash or bank payments for running the business.

Issuance of stock refers to collection of money by the company through issuing equity or preference shares.