- 1 Marks
Question
The following are components of equity EXCEPT:
A. Ordinary share capital
B. Share premium
C. Revaluation reserves
D. Retained earnings
E. Loan notes
Answer
Answer: E. Loan notes
Explanation: Loan notes represent a liability, not equity. They are a form of debt that the company must repay in the future, which makes them part of the company’s liabilities, specifically long-term liabilities, not equity. Equity components include share capital, reserves, and retained earnings.
- Tags: Equity, Financial Statements, Loan Notes, Share Capital
- Level: Level 1
- Topic: Elements of Financial Statements
- Series: MAY 2017
- Uploader: Kwame Aikins