The stockholders' equity section of a corporation's balance sheet can be divided into_____.
A)net income and retained earnings
B)retained earnings and paid-in capital
C)net income, retained earnings, and paid-in capital
D)paid-in capital and net income

Question

Quizplus · Accepted Answer

The stockholders' equity section of a corporation's balance sheet comprises two main components - retained earnings and paid-in capital. Retained earnings represent the portion of the company's profits that haven't been distributed to shareholders as dividends, and paid-in capital represents the amount of capital contributed by shareholders in exchange for ownership in the company. Therefore, choice B, retained earnings and paid-in capital, is the correct option.

The Stockholders' Equity Section of a Corporation's Balance Sheet Can