Stockholders' equity in a corporation consists of:
A)long-term assets.
B)current assets plus long-term assets.
C)assets plus liabilities.
D)contributed capital plus retained earnings.

Question

Quizplus · Accepted Answer

Stockholders' equity represents the residual interest of the shareholders in the assets of a corporation after deducting its liabilities. Contributed capital includes the amounts received from the shareholders in exchange for the corporation's stock, while retained earnings represent the cumulative net income earned by the corporation that has not been distributed to the shareholders as dividends. Therefore, the correct answer is D - contributed capital plus retained earnings.

Stockholders' Equity in a Corporation Consists Of