BUSINESS ADMINISTRATION
ACCOUNTING FOR MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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To see the movements of equity in a given period
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To show that profit increases equity
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To show that there are various transactions affecting the equity account
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To encourage business owners to invest more money
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Detailed explanation-1: -It provides an account of how equity moves through the business throughout the reporting period (usually one year). The statement begins with the opening equity balance for the period, adding and subtracting items over time such as profits and dividend payments to get to the closing balance for the period.
Detailed explanation-2: -A statement of change in equity (also referred to as statement of retained earnings) is a business’ financial statement that measures the changes in owners’ equity throughout a specific accounting period. It covers the following elements: Net profit or loss.
Detailed explanation-3: -The statement explains the changes in a company’s share capital, accumulated reserves and retained earnings over the reporting period. It breaks down changes in the owners’ interest in the organization, and in the application of retained profit or surplus from one accounting period to the next.
Detailed explanation-4: -Contents of the Statement of Changes in Equity Dividend payments. Proceeds from the sale of stock. Treasury stock purchases. Gains and losses recognized directly in equity.
Detailed explanation-5: -The formula for a statement of changes in equity includes the opening and closing value of the equity, net income for the year, dividends paid, and other changes.