Which equation is correct?
A)Assets = Liabilities + Contributed Capital - Dividends
B)Shareholders' Equity = Assets - Liabilities + Contributed Capital + Net Income
C)Shareholders' Equity = Contributed Capital + Retained Earnings + Net Income - Dividends
D)Retained Earnings = Net Income + Dividends
E)none of the above

Question

Quizplus · Accepted Answer

The equation for shareholders' equity is Shareholders' Equity = Contributed Capital + Retained Earnings + Net Income - Dividends. This equation takes into account the initial investment made by shareholders (contributed capital), the profits earned by the company (net income and retained earnings), and any payments made to the shareholders (dividends). It correctly represents the relationship between the different parts of the equity section of the balance sheet.

Which Equation Is Correct