Equity Decreases as a Result of Revenues and Expenses

question 217

True/False

Equity decreases as a result of revenues and expenses.

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Definitions:

Dividends in Arrears

Dividends on cumulative preferred stock that have not been paid in the period they were due.

Authorized Shares

The maximum number of shares that a corporation is legally allowed to issue, as specified in its articles of incorporation.

Total Capital

The sum of a company's debt and equity, representing the total funds available to the business for use.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits.