Typically,the statement of stockholders' equity starts with total stockholders' equity at the beginning of the year,adds net income,subtracts dividends paid,and ends up with total stockholders' equity at the end of the year.Over time,a profitable company will have earnings in excess of the dividends it pays out,and will result in a substantial amount of retained earnings shown on the balance sheet.

Question

Quizplus · Accepted Answer

This is a correct statement describing how the statement of stockholders' equity is typically prepared and how a profitable company can accumulate retained earnings over time.

Typically,the Statement of Stockholders' Equity Starts with Total Stockholders' Equity