The amount of equity in a business is not affected by:
A) The percentage of total assets held in cash.
B) Investments made in the business by the owner.
C) The profitability of the business.
D) The amount of dividends paid to shareholders.

Question

Quizplus · Accepted Answer

The percentage of total assets held in cash does not affect the equity of a business. Equity is affected by investments, profitability, and dividends, but not by the form in which assets are held.

The Amount of Equity in a Business Is Not Affected