Which of the following statements is FALSE?

Question 7 options:

1) Organisations that are required to comply with accounting standards, are not required to produce a statement of changes in equity but may choose to do so voluntarily.

2) Equity is the residual interest in the assets of the entity after deducting its liabilities.

3) For a sole trader, the financial statements might only show one equity account, which might be referred to as the capital account.

4) For a company, the components of equity might include share capital, retained earnings and reserves.