Chap 3

Question 1

is a statement dated “for the year
ended.”
- The report shows a reconciliation of the beginning and ending balances of the equity accounts.
- It summarizes the equity transactions with the owners of the business that occurred during the
year

Answer 1

Statement of changes in equity

Question 2

The SFP and SoCE will present one capital
account because….

Answer 2

There is only one owner

Question 3

The owner’s capital account has a _________________ balance

Answer 3

Normal credit balancee

Question 4

is owned by two or more partners.

Answer 4

Partnership

Question 5

in closing a partnership accounts

Answer 5

just add em all

Question 6

in corporation, Three new equity accounts may be used, namely

Answer 6

a) capital stock,
b) additional paid-in capital, and
c) retained earnings.

Question 7

in corpo, We remain focused on only three equity transactions

Answer 7

capital
contributions, drawings, and accumulation of net income.

Question 8

The stockholders’ equity of a corporation is divided into two parts,

Answer 8

paid-in capital and retained earnings.

Question 9

 is composed of capital stock and additional paid-in capital
 is the amount of contributions given or will be given to the
corporation in exchange for its common stocks

Answer 9

Paid in capital

Question 10

Three Basic Forms of Business Organizations

Answer 10

1. Sole proprietorship
2. partnership
3. corporation

Question 11

owned by two or more partners.

Answer 11

partnership

Question 12

in corporation three new equity accounts may be used,
namely

Answer 12

a) capital stock,
b) additional paid-in capital, and
c) retained earnings.

Question 13

reports the undistributed earnings of the corporation

Answer 13

retained earnings

Question 14

is the minimum price by which corporations can issue stocks to shareholders. The
excess of the issue price over the par is reported as additional paid-in capital.

Answer 14

Par value