Chapter 20 Flashcards
1
Q
normal balance of equity
A
credit
2
Q
advantages of issuing equity
A
- dividends not required
- corporate structure (separate legal entity)
- ability to raise capital on market
3
Q
disadvantage of issuing equity
A
- dilutes ownership when issuing new shares
4
Q
retained earnings
A
the net earnings of the company not paid out as dividends
5
Q
how to close revenues?
A
debit revenues, credit RE
6
Q
how to close expenses?
A
debit RE, credit expenses
7
Q
stated value is treated like _____ value
A
par
