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Which of the following statements regarding equity is not true?

A. It includes the retained earnings of the entity
B. It is increased by profit
C. It can be increased by additional contributions by the owners
D. It is defined independently of assets and liabilities

User Noah Thorp
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1 Answer

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Hi, I'd be happy to help with your question about equity.

The statement that is not true regarding equity is:

D. It is defined independently of assets and liabilities.

Equity is calculated as the difference between a company's assets and liabilities. The other statements (A, B, and C) are true. Equity includes the entity's retained earnings, is increased by profit, and can be increased by additional contributions by the owners.

User Trludt
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