Which of the statements below is TRUE?
A)The ownership accounts or owners' equity section of the balance sheet reflects the owners' stake in the firm.
B)The ownership accounts or owners' equity section of the balance sheet is made up of common stock but not retained earnings.
C)The retained earnings amount on the balance sheet really reflect retained earnings and other stockholder equity,but not treasury stock.
D)The Statement of Retained Earnings is used to show the distribution of the interest paid for the past period.

Question

Quizplus · Accepted Answer

The ownership accounts or owners' equity section of the balance sheet represents the owners' share in the company, including their investment and any earnings that have been retained in the business. Therefore, A is the correct statement, while the other options are false. B is incorrect as retained earnings is a significant part of the ownership accounts. C is false because treasury stock is included in the owner's equity section. Finally, D is inaccurate, as the Statement of Retained Earnings demonstrates changes in the retained earnings amount over a given period, but it does not show interest payments.

Which of the Statements Below Is TRUE