Which of the Following Is a True Statement Regarding Owners

question 58

Multiple Choice

Which of the following is a true statement regarding owners' equity?

• A)APB Statement 4 and SFAC No. 6 both reflect the entity view of the firm.
• B)Owners' equity consists of only two components: contributed capital and retained earnings.
• C)In a sole proprietorship, there is no legal distinction between contributed capital and earned capital.
• D)Dividends are legally paid only out of retained earnings.

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Definitions:

Past Event

A situation or occurrence that has already taken place.

Relevant

Pertaining to decision-making, it refers to information or costs that will change as a result of a decision, thereby affecting the outcome.

Total Cost

The sum of all expenses associated with the production or provision of goods and services, including fixed and variable costs.

Per Unit

A term referring to the cost, price, or measurement associated with a single unit of a product or service.