During the year, Millstone Company earned $6,500 of cash revenue, paid cash dividends of $1,000 to stockholders and paid $4,000 for cash expenses. Liabilities were unchanged. Which of the following accurately describes the effect of these events on the elements of the company's financial statements?
A) Assets increased by $6,500.
B) Assets increased by $1,500.
C) Stockholders' equity increased by $2,500.
D) Assets increased by $5,500.

Question

Quizplus · Accepted Answer

The net increase in assets is $1,500, calculated as $6,500 (revenue) - $4,000 (expenses) - $1,000 (dividends).

During the Year, Millstone Company Earned $6,500 of Cash Revenue