A statement of stockholders' equity lists balances of which of the following accounts?

• A. Assets, liabilities, and equity
• B. Cash, accounts receivable, and inventory
• C. Common stock, retained earnings, and other equity accounts
• D. Revenues, expenses, and net income

Answer: (C)

Verified step by step guidance

1. Understand the purpose of the statement of stockholders' equity: It is a financial statement that shows changes in equity accounts over a specific period, including contributions from stockholders, retained earnings, and other equity adjustments.
2. Identify the accounts typically included in the statement of stockholders' equity: These accounts are related to ownership and equity, such as common stock, retained earnings, and other equity accounts (e.g., treasury stock, additional paid-in capital).
3. Clarify why assets, liabilities, and equity are not listed: These are components of the balance sheet, not the statement of stockholders' equity. The statement focuses solely on equity-related accounts.
4. Explain why cash, accounts receivable, and inventory are excluded: These are asset accounts and are reported on the balance sheet, not the statement of stockholders' equity.
5. Discuss why revenues, expenses, and net income are not directly listed: These are components of the income statement. However, net income indirectly affects the statement of stockholders' equity through retained earnings.