Question

a. All statements are true b. Two main areas of the equity section of a corporation's balance sheet are share capital and retained earnings c. Equity section for the sole proprietorship can be called owner's equity because the equity belongs to the owner. d. Equity section for a corporation can be called shareholders' equity because the equity belongs to a group of owners known as shareholders. e. None of the statements are true

Answer 1

Correct answer is a i.e all statements are true.

1. Two main areas of equity section of corporation balance sheet are share capital and retained earmings where share capital denotes the amount raised by issuing shres and retained earnings consists of the earnings of the corporation of previous years which are carried forward.

2. Sole proprietorship is run by only a single persons and he bears all the risk and is the only owner of the profits and thus it's capital can also be called owner's equity.

3. Equity section can be called as shareholder's equity since the amount is raised by issuing shares to the shareholders and they are the owners of the organization.