Following are several items that may have an effect on the Retained Earnings account.
• Issuing common stock
• Cash dividend
• Stock dividend
• Stock split
• Purchasing treasury stock
• Selling treasury stock
• Net income
• Net loss
• Prior period error that overstated revenues
• Prior period error that overstated expenses
Required:
(a) For each item, indicate whether it increases, decreases, or has no effect on Retained Earnings.
(b) For each item, indicate whether the effect on Retained Earnings is immediate (that is, initial recording of the item would include a debit or credit to Retained Earnings in the journal entry) or occurs during closing entries.
(c) For each item, indicate whether it increases, decreases, or has no effect on total stockholders’ equity.