Question

Which two accounts increase equity? 1. Dividends and Expense 2. Stock and Revenue 3. Revenue and Expenses 4. Stock and Dividends

Answer 1

Stock and Revenue are the two accounts that increase equity.

Step-by-step explanation:

The two accounts that increase equity are Stock and Revenue. Stock represents the ownership capital invested in the company by its shareholders, and revenue represents the income earned by the company from its operations.

When stock is issued, it increases the equity of the company because it represents additional funds invested in the business. Revenue also increases equity because it adds to the company's net income, which is a component of equity.