Questions: There are several types of accounts, that impact equity. Which of the accounts below cause equity to increase? Revenues and Assets Common Stock and Revenues Common Stock and Expenses Dividends and Assets

The answer is the second one: Common Stock and Revenues.

Explanation for each option:

1. Revenues and Assets:

   • Revenues increase equity because they represent income earned by the company.
   • Assets do not directly impact equity. They are resources owned by the company and are part of the balance sheet equation (Assets = Liabilities + Equity).

2. Common Stock and Revenues:

   • Common Stock increases equity because it represents the investment made by shareholders into the company.
   • Revenues increase equity as they represent the income earned by the company.

3. Common Stock and Expenses:

   • Common Stock increases equity as it represents shareholder investment.
   • Expenses decrease equity because they represent costs incurred by the company in earning revenues.

4. Dividends and Assets:

   • Dividends decrease equity because they represent a distribution of earnings to shareholders.
   • Assets do not directly impact equity as explained above.

Summary: Common Stock and Revenues both cause equity to increase, making the second option the correct answer.