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Indicate Whether Each of the Following Statements About Equity Is

question 111

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Indicate whether each of the following statements about equity is true or false.
_______ a)Operating expenses reported on the income statement decrease retained earnings.
_______ b)Owners' equity and liabilities can be viewed either as sources of assets or claims to assets of the business.
_______ c)Retained earnings is increased by loans received from a bank.
_______ d)Dividends paid to stockholders decrease common stock.
_______ e)Owners' equity is the residual interest in the company resulting from the difference between assets and liabilities.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security representing an ownership interest in a corporation.

Revised Act

An amended version of legislation that incorporates changes and updates to the original act.

Stock Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell shares of stock at a set price on or before a specified date.

Compensation Plans

A system of payment or rewards offered by an employer to its employees for their work or performance.

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