One of the basic concepts of accounting is the accounting formula. assets equal liabilities plus equity. 0:16 Always assets equal liabilities plus equity. 0:23 For example, if assets are 100,000 and liabilities are 20,000, then equity must be 80,000. 0:35 The income statement shows revenue minus expense equals net income. 0:44 Remember, a dividend is not an expense. Dividends are not shown on the income statement. They are shown on the statement of retained earnings which comes next. 1:00 The statement of retained earnings shows beginning retained earnings plus net income 1:09 minus the dividend. Here's the dividend 1:13 is ending retained earnings. Let me put some numbers here. 1:18 If you have $12,000 in beginning retained earnings 1:25 and you have net income of A plus 8000 Accounting Equations Video Transcript 1:30 dividends are minus 1200. Your ending retained earnings will be 18,800. 1:43 Remember, a dividend is shown only on the statement of retained earnings.