Q: Regarding Alter’s caution about violations of the clean surplus relationship, examples of items that can violate this relationship include:
A. foreign currency gains and losses under the current rate method
B. changes in the market value of debt and equity held as trading securities
C. changes in net working capital
Answer is A but I think C technically speaking can violate the relationship right? Because one example of changes in Net WC that would bypass income statement and directly impact Equity is when owners raise equity funds to purchase stocks. Any thoughts?