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It is accurate that when a corporation sells a variety of goods, the cost of sales for each product will be shown in a single line item on the income statement since stockholders' equity is overstated.
The correct answer is true
What makes it known as shareholders equity?
The equivalent of owner's equity in a sole proprietorship is stockholder equity in a corporation. Those who possess shares of a corporation are referred to as stockholders (or shareholders) because they do so. Paper proof of ownership in a firm can be found in stock certificates.
How does the stockholders equity formula work?
Stockholders' equity is calculated by multiplying the total assets by the total liabilities. The balance sheet of the business, which is included in its annual report or quarterly 10-K report submitted to the Securities & Exchange Board, contains the financial information required for the formula.
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