The statement of changes in equity is dependent on the results from
A)the statement of cash flows.
B)the statement of financial position.
C)the income statement.
D)a company's share capital.

Question

Quizplus · Accepted Answer

The statement of changes in equity shows the changes in a company's equity during a specific period, and is derived from the net income (or loss) reported on the income statement. Therefore, the statement of changes in equity is dependent on the income statement. The statement of cash flows and the statement of financial position provide important information about a company's financial position, but they are not directly used in the preparation of the statement of changes in equity. The amount of share capital may be shown on the statement of changes in equity, but it is not a determining factor in the preparation of the statement.

The Statement of Changes in Equity Is Dependent on the Results