The Statement of Changes in Equity Is Required

question 57

Multiple Choice

The statement of changes in equity is required:

• A) because AASB 101 deals with income and does not define profit.
• B) to show profit and loss for the period.
• C) to summarise the large number of transactions that take place on the income statement.
• D) to provide a reconciliation of opening and closing equity, and also to provide details of the various equity accounts that are impacted by the period's total comprehensive income.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed.

Bonds Payable

Long-term liabilities representing money a company must pay back to bondholders by a specified maturity date.

Operating Activities

The primary revenue-generating activities of an organization, as opposed to investing and financing activities.

Financing Activities

Transactions and events where a business raises funds to support its operations or capital expenditures often through borrowing or issuing equity.