Which of the following stockholder equity accounts follow the same debit and credit rules as liabilities?
A) Capital Stock only
B) Dividends only
C) Retained Earnings and Capital Stock
D) Retained Earnings, Capital Stock, and Dividends

Question

Quizplus · Accepted Answer

Retained Earnings and Capital Stock both follow the same debit and credit rules as liabilities. They are both parts of the stockholder equity section of the balance sheet and are affected by transactions such as issuing stock, repurchasing stock, recording net income or net loss, and paying dividends. Dividends, on the other hand, are treated as distributions of the company's earnings and do not follow the same debit and credit rules as liabilities.

Which of the Following Stockholder Equity Accounts Follow the Same