The book value of the shareholders' ownership is represented by:
A)the sum of the par value of common stock,the capital surplus and the accumulated retained earnings.
B)the total assets minus the net worth.
C)the sum of the preference shares,debt and the capital surplus.
D)the sum of the total assets minus the current liabilities.
E)None of the above.

Question

Quizplus · Accepted Answer

The book value of the shareholders' ownership represents the net worth of the company, and is calculated by adding the par value of the common stock, the capital surplus, and the accumulated retained earnings. Option A represents this calculation. Option B represents the calculation of total assets minus net worth, which is not the same as book value. Option C includes preference shares and debt, which may not be relevant to the calculation of book value. Option D includes current liabilities, which is not relevant to the calculation of book value.

The Book Value of the Shareholders' Ownership Is Represented By