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- 1 Marks
Question
In the statement of financial position, equity is best described as:
A. Market value of the shares of the owners
B. Issued capital and reserves
C. Issued capital and loan notes
D. Revenue and gains
E. Expenses and losses
Answer
Answer:
B. Issued capital and reserves
Explanation:
Equity in the financial statements is primarily represented by issued capital and reserves. This reflects the owners’ interest in the business after liabilities have been subtracted from assets. It does not include loan notes, revenues, or gains, as these are distinct financial elements.
- Tags: Capital, Equity, Financial Position, Reserves
- Level: Level 1
- Topic: Elements of Financial Statements
- Series: MAY 2016
- Uploader: Joseph