Final answer:
The correct answer is A. statement of shareholders' equity. This statement details the company's equity transactions with its shareholders, such as issuing stock and paying dividends.
Step-by-step explanation:
The financial statement which reports investments from owners and distributions to owners during a particular period is the statement of shareholders' equity. This financial statement is crucial for understanding changes in the equity section of a company's balance sheet over a set period. It showcases transactions involving shareholders, including investments made into the company, typically through the purchase of stock, and distributions made to them, often in the form of dividends.
When a company raises financial capital by selling stock in an initial public offering (IPO), it increases its shareholders' equity. Conversely, when a firm issues dividends to shareholders, it represents a distribution of profits and a reduction in shareholders' equity. Thus, the statement of shareholders' equity provides an overview of a corporation's finance dealings with its owners/shareholders.