Respuesta :
An increase in a revenue increases stockholders’ equity.
Generally, when a corporation earns revenue there is an increase in current assets and an increase in the retained earnings component of stockholders’ equity.
Revenues increase stockholders’ equity through retained earnings. This helps illustrate the direct connection between a company's income statement and balance sheet.
When stockholders’ equity rises, it may also indicate growth in a company's profits. As revenues increases, net income also increases. As net income increases, retained earnings increases which leads to the increase in shareholders equity by the same amount.
Hence, an increase in a revenue leads to the increase in stockholders’ equity.
To learn more about the stockholders’ equity here:
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