Q22RQ - Horngren'S Financial And Managerial Accounting

Question

What does the statement of stockholders’ equity report? How does the statement of stockholders’ equity differ from the statement of retained earnings?

Step-by-Step Solution

Answer

The statement of stockholders' equity is another choice for accounting the changes in stockholders' equity of a corporation. This statement of stockholders possesses more information in comparison to the statement of retained earnings in statement of stockholders it reports the changes in all stockholders' equity accounts, not just retained earnings.

Step 1: Introduction to Statement of stockholders

A statement of shareholders' equity represents the changes within the equity section of the balance sheet throughout an assigned time frame.

Step 2: The statement of stockholders’ equity differs from the statement of retained earnings

The retained earnings statement represents the changes between the starting and ending balances of the retained earnings account during the period, the statement of stockholders' equity represents the changes between the starting and ending amount of each of the stockholders' equity accounts, including retained earnings.