The statement of changes in equity shows the changes in Owners' equity.Which one of these statements is TRUE?

Question

Quizplus · Accepted Answer

Decreases in Owners' equity result from losses. This is because losses decrease the net assets of the business, which directly affects the Owners' equity. The other options are not true because owner investments or revenues earned usually result in an increase in Owners' equity, while profit may or may not result in an increase depending on whether it is distributed to the owners or kept in the business.

The Statement of Changes in Equity Shows the Changes in Owners