Question

The stockholders' equity section in the balance sheet shows: Multiple Choice The ending balance in each stockholders' equity account. How each equity account changed over time. More information than the statement of stockholders' equity. The average balance in each stockholders' equity account.

Answer 1

The stockholders' equity section in the balance sheet shows the ending balance in each stockholders' equity account, reflecting a company's net worth or bank capital.

Step-by-step explanation:

The stockholders' equity section in the balance sheet shows the ending balance in each stockholders' equity account. It presents the net worth of a company, indicating the value remaining for shareholders after all liabilities have been accounted for. The balance sheet stands as a static snapshot at a single point in time, contrasting with the statement of stockholders' equity, which provides details on the changes to equity accounts over a specific period. A bank's balance sheet, for example, will reflect its net worth as bank capital, encompassing elements like cash held, reserves at the Federal Reserve, loans made to customers, and bonds.

Answer 2

The stockholders' equity section in the balance sheet shows the ending balance in each stockholders' equity account, summarizing the company's ownership value at a specific moment.

Step-by-step explanation:

The stockholders' equity section in the balance sheet shows the ending balance in each stockholders' equity account. A balance sheet provides a snapshot of a company's financial position at a specific point in time, illustrating the company's assets, liabilities, and shareholders' equity. The stockholders' equity represents the owners' claim after subtracting total liabilities from total assets.

On the balance sheet, each equity account will show its ending balance but will not show how each account changed over time. This change over time can be found in the statement of stockholders' equity, which is another financial statement that shows the movements in equity over a reporting period. Thus, the correct answer to the question is that the stockholders' equity section shows the ending balance in each stockholders' equity account.