The statement of changes in stockholders\' equity: Shows only the ending balance

Question

The statement of changes in stockholders' equity:

Shows only the ending balances in stockholders' equity.

Is part of the statement of retained earnings.

Does not include changes in treasury stock.

Is reported by very few companies.

Describes changes in paid-in capital and retained earnings subcategories.

Shows only the ending balances in stockholders' equity.

Is part of the statement of retained earnings.

Does not include changes in treasury stock.

Is reported by very few companies.

Describes changes in paid-in capital and retained earnings subcategories.

Explanation / Answer

Statement of changes in stockholders' equity

Shows all the activities and transactions which have affected the stockholders' equity. So, option A is not correct

Statement of changes in stockholders' equity is itself statement of retained earnings and not just a part of it. So, option B is also not correct

Statement of changes in stockholders' equity shows all the activities and transactions which have affected the stockholders' equity and this also includes changes in treasury stock. So, option C is also not correct

Statement of changes in stockholders' equity is reported by every company. So, option D is also not correct

Statement of changes in stockholders' equity describes changes in paid-in capital and retained earnings subcategories in a detailed format. So, option E is correct

So, as per above discussion, option E is the correct option

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