The equity of a corporation changes because of net income or losses,distributions of incomes (dividends)and shareholder investments.

Question

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The equity of a corporation is affected by the net income or losses earned during a period, the distributions of incomes in the form of dividends to shareholders, and the investments made by shareholders in the company. These factors can either increase or decrease the equity of a corporation, depending on the magnitude of the amounts involved.

The Equity of a Corporation Changes Because of Net Income