Equity Review
Shareholders' Equity
Equity represents the owners' residual interest in a company after liabilities are deducted from assets. FAR frequently tests stock transactions, treasury stock, dividends, retained earnings, and earnings per share.
- Common and preferred stock.
- Treasury stock.
- Stock dividends and splits.
- Retained earnings.
- Earnings per share.
Summary
Equity questions often combine journal entries with financial statement effects.