Question

Non-controlling interests found in the equity section represent the equity interests of:

a) Majority shareholders
b) Minority shareholders
c) Preferred shareholders
d) Debenture holders

Answer 1

Non-controlling interests in the equity section are equity interests held by minority shareholders who own shares in a firm without a controlling stake.

Step-by-step explanation:

The non-controlling interests found in the equity section of a corporation's balance sheet represent the equity interests of minority shareholders. These shareholders are individuals or entities that own shares in a firm but do not have a controlling stake.

They have a claim on a portion of the earnings and assets of the company, which is proportionate to their ownership but they lack the influence over the company's operations that majority shareholders possess. When a corporation issues stock, these minority shareholders have a claim on part ownership of the company and may receive dividends proportionate to their stake, although there is no obligation for the company to pay out dividends, especially if the earnings are being reinvested for future growth.