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Effects of Basic Tranactions on Retained Earnings Statement and Stockholder Equity

Retained Earnings
Stockholders
Description Account Titles Net Common Retained Equity
Dividends
Income Stock Earnings

Cash
Issuance of stock to
investors (owners)
Common Stock

Payment of a dividend to Dividends


the companys owners
also known as
stockholders Cash

Advance payment from a Cash


customer for payment of
services or sales to be Unearned Sales
performed at a future date
Revenues

Providing the services or Cash


sales that the company is
in the business to
Service
perform for cash.
Revenue
Providing the services or
Accounts
sales that the company is
Receivable
in the business to
perform on credit.
Service
Customer will pay at a
later date in time. Revenue
Received cash on
account from customers Cash
who owes money to the
company for services or Accounts
sales. Receivable

Payment of regular Rent Expense


monthly bills with cash
such as rent, utilities, or
salaries. Cash

MJC 2017 1
Effects of Basic Tranactions on Retained Earnings Statement and Stockholder Equity

Retained Earnings
Description Stockholders
Account Titles Net Common Retained Equity
Dividends
Income Stock Earnings
Recording of monthly Telephone
expenses on account Expense
(credit) Bills accrued at
months end Accoun
Accounts Payable t Titles
The purchase and Prepaid
prepayment of an asset Insurance
with cash before it is
used by the company.
I.e. Insurance, rent, or Cash
supplies.

MJC 2017 2