Following are several items that may have an effect on the Retained Earnings account Issuing common stock Cash dividend Stock dividend Stock split Purchasing treasury stock Selling treasury stock Net income Net loss Prior period error that overstated revenues Prior period error that overstated expe...

a Effect on RE b Timing of Effect c Effect on Total S ...

Following are several items that may have an effect on the Retained Earnings account. Issuing common

Question:

Following are several items that may have an effect on the Retained Earnings account.
• Issuing Cash Stock Stock split
• Purchasing treasury stock
• Selling treasury stock
• Net income
• Net loss
• Prior period error that overstated revenues
• Prior period error that overstated expenses
Required:
(a) For each item, indicate whether it increases, decreases, or has no effect on Retained Earnings.
(b) For each item, indicate whether the effect on Retained Earnings is immediate (that is, initial recording of the item would include a debit or credit to Retained Earnings in the journal entry) or occurs during closing entries.
(c) For each item, indicate whether it increases, decreases, or has no effect on total stockholders’ equity.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...