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The equity of a corporation changes because of profits or losses, distributions of incomes (dividends) and...

The equity of a corporation changes because of profits or losses, distributions of incomes (dividends) and shareholder investments.
-True
-False

Business   Accounting   
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Answer #1

Answer - True

Definitely the equity of a corporation changes because of profits or losses, distributions of incomes (dividends) and shareholder investments.

Explanation -

Equity of a corporation include the commom shares, preferred stock, contributed surplus, retained earnings and comprehensive earnings etc as if there will be distribution of incomes then the retained earnings will be affected and which further changes the equity becuase they are the part of equity. Shareholder investments affect the common stocks and prefferd stock and which also changes the equity as they are also part of equity.

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