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3 April, 09:20

The statement of retained earnings or the statement of stockholders' equity reconciles the net income, dividends paid, and the change in retained earnings during a particular year. Which of the following best describes shareholders equity? Equity is the initial claim on value of the assets before the firm pays off its liabilities. Equity is the difference between the company's assets and liabilities.

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  1. 3 April, 13:15
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    Answer: "Equity is the difference between the company's assets and liabilities" Describes shareholders equity.

    Explanation: This statement is reflected in the basic equity equation:

    Assets = Liabilities + Equity.

    If we clear the net worth it would be:

    Assets - Liabilities = Equity.
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