Equity Theory States That Equity Exists When the Ratio of Outcomes

question 64

True/False

Equity theory states that equity exists when the ratio of outcomes to inputs for one person is equal to the same ratio for another person.

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Definitions:

Comparative Balance Sheet

A financial statement that presents a company's financial position at different points in time side-by-side to assess changes in assets, liabilities, and equity.

Cash Dividend

A cash dividend is a payment made by a company to its shareholders, typically from its profits, in the form of cash or electronic funds transfer.

Financing Activities

Transactions and events involving changes in equity and debt in the financial structure of a company, such as issuing shares or taking loans.

Comparative Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders’ equity of a company at two or more different points in time, used to analyze trends in financial position.