The two major elements of stockholders' equity are
A)retained earnings and distributable earnings
B)contributed capital and donated capital
C)paid-in capital and contributed capital
D)paid-in capital and retained earnings

Question

Quizplus · Accepted Answer

The two major elements of stockholders' equity are paid-in capital and retained earnings. Paid-in capital represents the amount of capital contributed by the stockholders, and retained earnings represent the portion of a company's earnings that are not distributed to stockholders as dividends but rather are retained by the company to reinvest in the business. Therefore, option D (paid-in capital and retained earnings) is the correct answer.

The Two Major Elements of Stockholders' Equity Are