EX 1-11 Effect of transactions on stockholders’ equity

Indicate whether each of the following types of transactions will either (a) increase stockholders’ equity or (b) decrease stockholders’ equity:

1. expenses

2. issuing common stock in exchange for cash

3. dividends

4. revenues

Answer:

1. (b) decrease 

2. (a) increase 

3. (b) decrease 

4. (a) increase