The Statement of Changes in Stockholders' Equity Shows

question 44

Multiple Choice

The Statement of Changes in Stockholders' Equity shows:

• A)the change in cash during a year.
• B)revenues, expenses, and liabilities for the period.
• C)net income and dividends for the period.
• D)paid-in capital and long-term debt at the end of the period.

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Definitions:

Expenses Paid

Refers to the amounts of money disbursed to cover operating costs or charges incurred in the conduct of a business.

Expense Recognition Principle

An accounting principle that expenses should be recognized in the period in which they are incurred, matching them with the revenues they help to generate.

Time Period Assumption

An accounting principle that allows an organization to divide its economic activities into specific time periods such as months, quarters, or years for reporting purposes.

Adjusting Entries

Closing entries in accounting at the end of a period to ensure income and expenses are attributed to the period in which they took place.