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Assets =
Common stock + retained earnings + liabilities
Net Income
is the benefits a company has earned, less the sacrifices made to earn them. It is a benefit to the owners (SHE) through retained earnings.
Dividend
benefits paid out to the owners
Revenues
Earn benefits (revenues) by providing goods/services for cash
expenses
sacrifice cash to earn benefits
revenues - expenses =
net income (If Revenues are < Expenses, then Revenues – Expenses is negative = Net Loss)
Revenues impact on BS
+cash +retained earnings
Expenses impact on BS
-cash - RE
Dividends impact on the BS
-cash -RE
