Which of the following financial statements reports owner's equity as of the end of the accounting period? A. statement of owner's equity and the balance sheet B. income statement and the balance sheet C. cash flow statement and the balance sheet D. cash flow statement and the income statement

Question

Which of the following financial statements reports owner's equity as of the end of the accounting period? A. statement of owner's equity and the balance sheet B. income statement and the balance sheet C. cash flow statement and the balance sheet D. cash flow statement and the income statement

Answer 1

The correct answer is **A. statement of owner's equity and the balance sheet.**Here's why:* **Statement of Owner's Equity:** This statement directly reports the changes in owner's equity over an accounting period. It begins with the beginning balance, adds net income (or subtracts net loss), subtracts owner withdrawals, and arrives at the ending owner's equity balance.* **Balance Sheet:** This statement provides a snapshot of a company's financial position *at a specific point in time*. It lists assets, liabilities, and owner's equity. The owner's equity reported on the balance sheet is the ending balance calculated on the statement of owner's equity.The other statements don't directly report ending owner's equity:* **Income Statement:** Reports revenues and expenses over a period, resulting in net income or loss. This feeds into the statement of owner's equity but doesn't itself show the ending equity balance.* **Cash Flow Statement:** Shows the changes in cash over a period. While important, it doesn't directly report owner's equity.

Question

Which of the following financial statements reports owner's equity as of the end of the accounting period? A. statement of owner's equity and the balance sheet B. income statement and the balance sheet C. cash flow statement and the balance sheet D. cash flow statement and the income statement

Solution

Answer