Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

The Financial Statements

Financial Accounting

1. Introduction to Accounting

The Financial Statements

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Multiple Choice

Which of the following statements about the statement of stockholders’ equity is true?

It shows changes in each component of stockholders’ equity during the accounting period.

It does not include information about dividends declared.

It reports only the ending balances of assets and liabilities.

It is the same as the income statement.

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Verified step by step guidance

Step 1: Understand the purpose of the statement of stockholders' equity. It is a financial statement that provides details about changes in each component of stockholders' equity during a specific accounting period. Components typically include common stock, retained earnings, additional paid-in capital, and treasury stock.

Step 2: Clarify the role of dividends in the statement of stockholders' equity. Dividends declared are included in this statement because they reduce retained earnings, which is a component of stockholders' equity.

Step 3: Differentiate the statement of stockholders' equity from other financial statements. It does not report ending balances of assets and liabilities (this is done in the balance sheet) and is not the same as the income statement, which reports revenues and expenses.

Step 4: Evaluate the options provided in the problem. The correct statement should align with the purpose of the statement of stockholders' equity, which is to show changes in each component of stockholders' equity during the accounting period.

Step 5: Conclude that the correct answer is the option stating: 'It shows changes in each component of stockholders’ equity during the accounting period.' This aligns with the definition and purpose of the statement of stockholders' equity.