Which description describes SCOE?

• A. A cash flow statement
• B. A summary of costs of sales
• C. A balance sheet
• D. Reports change in capital from beginning to end of period; new capital balance found in previous SCOE

Answer: (D)

The main idea is that the SCOE shows how the owner’s capital changes over a period. It starts with the opening capital, adds or subtracts items like owner contributions, withdrawals, and net income or loss, and ends with the closing capital. The description that says it reports the change in capital from beginning to end of the period and that the new capital balance is found in the previous SCOE captures this flow: the ending balance from the prior period becomes the starting point for the next SCOE. This distinguishes it from a cash flow statement (which tracks cash movements), a summary of costs of sales (COGS), or a balance sheet (a snapshot of assets, liabilities, and equity at a single point in time).