Increases in shareholders' equity arise from:
A) net income earned during the period
B) payment of dividends
C) investments by the owner
D) both investments by the owner and net income earned during the period

Question

Quizplus · Accepted Answer

Increases in shareholders' equity can arise from both investments made by the owner and net income earned during the period. Net income is added to equity through the retained earnings account, while investments by the owner directly increase the owner's equity in the business. Payment of dividends reduces shareholders' equity.

Increases in Shareholders' Equity Arise From