Which of the Following Statements Is Correct

question 11

Multiple Choice

Which of the following statements is correct?

• A) Equity is defined as 'the residual interest in the assets of the entity after deducting all its expenses'.
• B) Equity is increased by profit and owner contributions.
• C) Equity is decreased by an entity's income.
• D) Equity cannot be sub-classified in the statement of financial position.

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Definitions:

Revised Article 3

An update to a section of the Uniform Commercial Code that deals with negotiable instruments, including changes to laws governing checks and promissory notes.

Drawer

In banking, the party that writes or issues a check. In a broader contract or legal sense, it can refer to the person who drafts or creates a document.

Cashier's Check

A check issued by a bank, drawn on its own funds rather than that of the purchaser, guaranteeing payment to the payee.

Issuer

An entity that issues and is responsible for a financial instrument, such as bonds, stocks, or credit cards.