BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following identities is FALSE?
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Change in Equity = Paid-in-Surplus-Net New Borrowing from Creditors
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Net New Borrowing = Ending Long-term Liabilities-Beginning Long-Term Liabilities
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Cash Flow to Owners = Dividends-Net New Borrowing from Owners
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Net New Borrowing from Owners = Change in Equity
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Explanation:
Detailed explanation-1: -The main accounts that influence owner’s equity include revenues, gains, expenses, and losses. Owner’s equity will increase if you have revenues and gains. Owner’s equity decreases if you have expenses and losses.
Detailed explanation-2: -What is Creditors’ Equity? Creditors’ equity is the proportion of assets that an organization is financing with credit extended to it by creditors.
Detailed explanation-3: -Statement of Retained Earnings-also called Statement of Owner’s Equity.
Detailed explanation-4: -Contents of the Statement of Changes in Equity The transactions most likely to appear on this statement are as follows: Net profit or loss. Dividend payments. Proceeds from the sale of stock.
There is 1 question to complete.