Week 2: Statement of Changes in Equity

Question 1

what is the statement of changes in equity (SCE)

Answer 1

1. shows the readers (who may not be involved in the firm) what has changed in the major ownership accounts that help finance the firm
2. shows things that increased and decreased in each account (not just net changes)
3. proof that the firm has generated enough new resources (profits) to justify the dividends that were paid out (if they had dividends). this proof is one of the main reasons that this statement started to appear in the 1920’s (as the Statement of Retained Earnings)

Question 2

review sheets:

Answer 2

https://bright.uvic.ca/d2l/le/content/237507/viewContent/1916683/View