The amount shown on the statement of ﬁnancial position as shareholders' equity represents the current market value of the owners' residual claim against the company.

Question

Quizplus · Accepted Answer

Shareholders' equity represents the residual claim against the company, but its amount on the statement of financial position reflects the accounting value rather than the market value.

The Amount Shown on the Statement of ﬁNancial Position as Shareholders