1.Which of the following statements is true about the Statement of Equity?

a. It summarizes changes in shareholders equity.

b. It summarizes the results of operations.

c. It summarizes the financial position of the organization.

d. It summarizes changes in operations.

2.What is the effect of a net loss on equity?

a. A net loss decrease shareholders equity.

b. A net loss increases shareholders equity.

c. A net loss is not a part of shareholders equity.

d. A net loss had no effect on shareholders equity.

3.Which of the following entries would occur when common stock is issued by a company?

a. PIC - Common decreases.

b. Common Stock increases.

c. Common Stock decreases.

d. Cash decreases.

4.What is the effect of net income on equity?

a. Net income has not effect on shareholders equity.

b. Net income is not a part of shareholders equity.

c. Net income decreases total shareholders equity.

d. Net income increases total shareholders equity.

5.If assets increase and liabilities stay the same or decrease, shareholders equity will increase.

True

False

6.The Statement of Equity is the next financial statement prepared after the Income Statement.

True

False

7. Shareholders own the equity of a company; therefore, they have a claim to the assets after liquidation and settlement of debts.

True

False

8.. Which of the following statement about equity is false?

a. Equity can be used to finance the purchase of assets.

b. Equity can be expressed as assets minus liabilities.

c. Equity is reported on the Income Statement.

d. Equity is reduced by payment of cash dividends.

9. The Statement of Equity is not required reporting by the SEC for publicly traded companies.

True

False