EQUITY PART 2

SHARE capital

• asset

• equity

When shares are issued.

• DR cash at bank CR share capital

• DR share capital CR cash at bank

part of profits DISTRIBUTED to shareholders

• drawings

• dividends

Dividends=

• expense

• income

• equity

• contra equity

SHAREHOLDERS’ EQUITY =

• share capital + retained earnings

• share capital - retained earnings

retained earnings =

• expense

• income

• asset

• equity

retained earnings = beginning re + profit - dividends

• true

• false

dividends are the SAME amount every year.

• true

• false

A business can choose NOT to give dividends in a particular year.

• TRUE

• FALSE

Dividends declared and PAID at same time. DR dividends CR

• dividends PAYABLE

• cash at bank