PRC-1 · Chapter 10 · Question 23 of 100
What is the primary purpose of the 'Statement of Changes in Equity'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) To detail the movements in the owner's capital, including profits, drawings, and new capital introduced.
Explanation
The Statement of Changes in Equity bridges the gap between the income statement and the balance sheet by showing how the equity of the business changed during the period due to profits/losses, drawings, and capital injections.
More Preparation of Financial Statements MCQs
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