Question

Which statement is true regarding stockholders' equity?

(a) It shows a company's stock issuances and dividends paid to shareholders
(b) It reports a company's assets, liabilities, and equities
(c) It reports a company's cash flows from operating activities, investing activities, and financing activities
(d) It reports a company's revenue and expenses for a period

Answer 1

The correct statement about stockholders' equity is that it reflects a company's stock issuances and dividends paid to shareholders. It is part of the balance sheet that indicates the ownership interest of shareholders in the company.

Step-by-step explanation:

The true statement regarding stockholders' equity is (a) It shows a company's stock issuances and dividends paid to shareholders. Stockholders' equity is a section of a company's balance sheet that shows the equity that the shareholders have in the company, which includes the money obtained from issuing stock and deductions for the dividends paid out to shareholders. Increasing a company's visibility in financial markets and accessing capital for expansion without the need to repay the money are benefits of issuing stock. Decisions about dividend payouts or reinvesting profits are typically made by the board of directors.