Equity is increased by revenues.

Here's why:

1. Equity represents the residual interest in the assets of an entity after deducting liabilities. In other words, equity is what's left over for the owners of a business after all the liabilities have been paid off.

2. Revenues increase equity because they represent the income earned by a business from its operating activities. When a company earns revenue, it increases the company's assets (such as Cash or Accounts Receivable) without increasing its liabilities. This increases the company's equity.

3. On the other hand, dividends and expenses decrease equity. Dividends are distributions of earnings to shareholders, and expenses represent the cost of doing business. Both of these reduce the amount of earnings that are retained in the business, thereby reducing equity.

4. Liabilities do not directly affect equity. However, if liabilities increase without a corresponding increase in assets, equity will decrease because equity is the difference between assets and liabilities.

Question

Equity is increased by revenues.

Here's why:

1. Equity represents the residual interest in the assets of an entity after deducting liabilities. In other words, equity is what's left over for the owners of a business after all the liabilities have been paid off.

2. Revenues increase equity because they represent the income earned by a business from its operating activities. When a company earns revenue, it increases the company's assets (such as Cash or Accounts Receivable) without increasing its liabilities. This increases the company's equity.

3. On the other hand, dividends and expenses decrease equity. Dividends are distributions of earnings to shareholders, and expenses represent the cost of doing business. Both of these reduce the amount of earnings that are retained in the business, thereby reducing equity.

4. Liabilities do not directly affect equity. However, if liabilities increase without a corresponding increase in assets, equity will decrease because equity is the difference between assets and liabilities.

Knowee AI · Accepted Answer

Equity is increased by revenues.

Here's why:

1. Equity represents the residual interest in the assets of an entity after deducting liabilities. In other words, equity is what's left over for the owners of a business after all the liabilities have been paid off.

2. Revenues increase equity because they represent the income earned by a business from its operating activities. When a company earns revenue, it increases the company's assets (such as Cash or Accounts Receivable) without increasing its liabilities. This increases the company's equity.

3. On the other hand, dividends and expenses decrease equity. Dividends are distributions of earnings to shareholders, and expenses represent the cost of doing business. Both of these reduce the amount of earnings that are retained in the business, thereby reducing equity.

4. Liabilities do not directly affect equity. However, if liabilities increase without a corresponding increase in assets, equity will decrease because equity is the difference between assets and liabilities.

Equity is increased by: Group of answer choices dividends. revenues. expenses. liabilities.

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