Which Statement Below Best Describes the Accounting Equation

question 170

Multiple Choice

Which statement below best describes the accounting equation?

• A)The change in retained earnings equals net income less dividends.
• B)Equality of revenue and expense transactions over time.
• C)Resources of the company equal creditors' and owners' claims to those resources.
• D)Financing activities equal investing and operating activities.

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Definitions:

Paid-in Capital

The total amount of cash and other assets that shareholders have contributed to the company in exchange for shares.

Dividends

A portion of a company's earnings that is distributed to shareholders.

Voting Rights

The privileges granted to shareholders to vote on matters affecting the company they have invested in.