Transactions affecting stockholders' equity include
A) capital contributions and payment of liabilities
B) capital contributions,stockholder dividends,earning of revenues,and incurrence of expenses
C) capital contributions,earning of revenues,incurrence of expenses,and collection of accounts receivable
D) stockholder dividends,earning of revenues,incurrence of expenses,and purchase of supplies on account

Question

Quizplus · Accepted Answer

Capital contributions and payment of liabilities (option A) do affect financing activities, but they do not directly impact stockholders' equity. 
Option C includes collection of accounts receivable which is a component of asset management and not relevant to stockholders' equity. 
Option D includes purchase of supplies on account which is an expense and not relevant to stockholders' equity. 
Option B, on the other hand, includes capital contributions which increase stockholders' equity, stockholder dividends which decrease stockholders' equity, earning of revenues which increases stockholders' equity, and incurrence of expenses which decreases stockholders' equity. Therefore, option B is the best choice.

Transactions Affecting Stockholders' Equity Include