Which of the following statements about stockholders' equity is false?
A)Stockholders' equity is the shareholders' residual interest in the company resulting from the difference in assets and liabilities.
B)Stockholders' equity accounts are increased with credits.
C)Stockholders' equity results only from contributions of the owners.
D)The purchase of land for cash has no effect on stockholders' equity.

Question

Quizplus · Accepted Answer

Stockholders' equity can also result from profits retained in the company rather than just contributions from owners. This is known as retained earnings. Option A, B, and D are true statements about stockholders' equity.

Which of the Following Statements About Stockholders' Equity Is False