1)A form of equity financing or raising money by allowing investors to be part owners of the company.

Q: How can I tell if a company is financed by debt or equity?

A: here you need to know what is debt and equity debt means you're borrowing money from an outside…

Q: Firms raise capital by: Select one: O a. Selling stock (equity) b. Issuing bonds or taking out loans…

A: Capital is the financial fund that is used for the running of a business by a person/organization.…

Q: Stockholders can best be  defined as which of the following? A. Investors who lend money to a…

A: The answer for the multiple choice question is given hereunder :

Q: Which one of the following is a payment of either cash or shares of stock that is paid out of…

A: Retained earnings are the part of the profit left over after payment of all the direct and indirect…

Q: credit to Investment in Peas Company.

A: Under equity method, the journal entry for receipt of cash dividend is Cash  A/c  Dr  xxxx    To…

Q: When an investor uses the equity method to account for investments in common stock, the investor’s…

A: Identify the appropriate answer for the given statement from the given choices. When an investor…

Q: you are an investor how do you assess the financial ratios of the company? And why

A: FINANCIAL ratios are considered to be an important indicator for the companies financial stability…

Q: Payment of Dividend to the shareholders is categorised as a) Operating Activity b) Financing…

A: Introduction: Statement of cash flows: All cash in and out flows are shown in statement of cash…

Q: A statement of equity helps companies make decisions about how to

A: Statement of owner’s equity: The statement of owner’s equity shows the change (increase or decrease)…

Q: This is cash flow available for payments to stockholders and debt holders of a firm after the firm…

A: The correct option is (b) free cash flow as after meeting all the necessary investments required to…

Q: True or False 1. In equity financing, the corporation is the investee, while the stockholders are…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: One major component of Equity is Contributed Capital. What does Contributed Capital represent? Group…

A: The question is related Contributed Capital. Contributed Capital is the paid up capital is the…

Q: One major component of Equity is Retained Earnings. What does Retained Earnings represent? Group of…

A: Retained earnings are undistributed profits of the company and the same is retained for future…

Q: How does Statement of Changes in Equity help a business to grow?

A: The financial statements of the business includes the income statement, Balance sheet, cash flow…

Q: Which of the following represent sources of funds to a firm: A. Creditors B. Investors C. Profitable…

A: Sources of fund refers to the source that provides the funds or supplies to the business to carry on…

Q: The business owner uses personal funds to purchase common stock in his company, what is the journal…

A: Lets understand the basics. Journal entry is required to make to record event or transaction occur…

Q: What are the distributions to the stockholders by a firm called?  A. retained earnings B. net income…

A: Any Company Typically divides the Profits between itself to the company or it's stock holders.…

Q: Which of the following statements regarding equity is not true? It is defined independently of…

A: The accounting equation states that assets equals to sum of liabilities and shareholders equity.

Q: Equity is the Amount of a company's capital is owned by the shareholders. In sole proprietorship and…

A: solution concept In a balance sheet of company There is asset , liabilities and equity Equity means…

Q: What is the purpose of making a Statement of Changes in Equity in a Company?

A: Statement of changes in equity is the reconciliation of beginning and ending balances of…

Q: Which of the following is a Long Term Source of Finance? a. Customer Advances b. Equity Shares c.…

A: Financial instruments are instruments that have some monetary value and are created due to the…

Q: If a company uses the equity method to account for an investment in another company, which of the…

A: The equity method is used when a company has ownership in another company of 20% to 50% of the…

Q: refers to the way a company finances itself through some combination of loans, bond sales, preferred…

A: The mix of equity and debt in a business organization is known as the capital structure of the…

Q: Equity financing is raising capital through borrowing.  2. A bond certificate is a contract of debt.…

A: The stock market is a collection of exchanges and other venues where publicly owned corporations'…

Q: Which of the following will result when a dividend is paid? A debit to dividends payable. A credit…

A: Concept used : When dividend is paid then journal entry will be to debit the dividend payable and…

Q: revenue may be defined as : a- increase in assets from all sources  b- the amount of capital…

A: Revenue is the income generated by a company using the assets employed by it in the normal course of…

Q: If you are a company owner, which one you choose debt financing, equity financing or a combination…

A: Finance is very important to run a business. It is very necessary to have finance to conduct day to…

Q: A company is involved in investing activities when these: Multiple Choice activities involve…

A: Investing activities include buying and selling of long term assets such as building, Machinery,…

Q: When an investor uses the equity method to account for investments in common stock, cash dividend…

A: 1. Equity method - Under an Equity method of accounting following entries and changes are made every…

Q: Which of the following are owners of Business? a. Public Deposits Holders b. Holders of Shares c.…

A: Entities acquire funds for various purposes like expansion or capital expenditures. So, the various…

Q: The funds supplied and used by the owner of an enterprise in the expectation that a profit will be…

A: A business raises funds from various sources to make investments and finance operations of the…

Q: Which of the following is classified as a financing activity? Receipt of dividend income   Receipt…

A: The statement of cash flows shows a clear picture of the cash position over a particular period of…

Q: Choose the correct.When an investor uses the equity method to account for investments in common…

A: When an investor uses the equity method to account for investments in common stock, the investor’s…

Q: If a company sells new shares of stock to raise money, this will result in a ____ to the contributed…

A: The contributed capital by selling new stock is a method of raising finance for the business entity.…

Q: Selling equity in the business provides both the opportunity to repurchase and the obligation to…

A: A business is started with the capital of the owner(s). The contribution made by owners are used to…

Q: In the application of the equity method, how should dividends from the investee be accounted for?…

A: Equity method: Equity method is the accounting method used for accounting equity investments which…

Q: 1. Answer the following questions for the Mason brothers. a) How are paid-in-capital and retained…

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the…

Q: Discuss how a company's primary financial statements are useful to potential investors who are…

A: Stock investing requires careful analysis of financial data to find out the company's true worth.…

Q: Why is a financial structure of a capitalization structure (a mix of equity and debt finance) being…

A: Answer: The financial structure of both debt and equity capital is often favored in the company…

Q: What would be the impact on the accounting equation when a company acquires treasury stock?…

A: Accounting equation: Accounting equation is an accounting tool expressed in the form of the…

Q: The gross increase in stockholder’s equity attributable to business activities are called: a)…

A: Stock holders equity = equity share capital + Reserves and surplus

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is