A company's stockholders' equity is bifurcated into:
A) current assets and long-term assets.
B) common stock and long-term assets.
C) retained earnings and long-term assets.
D) common stock and retained earnings.

Question

Quizplus · Accepted Answer

Stockholders' equity is divided into two main components, which are common stock and retained earnings. Common stock represents the initial investment made by shareholders to establish the company, while retained earnings represent the accumulated profits earned by the company over time that have not been paid out as dividends. Long-term assets are not part of stockholders' equity.

A Company's Stockholders' Equity Is Bifurcated Into