Each type of stock issued by a company represents a different claim on the organization,thus each must be represented by a separate owners' equity account called _____.
A)deferred revenue
B)contributed capital
C)insurance revenue
D)accounts payable
E)accrued taxes

Question

Quizplus · Accepted Answer

Contributed capital represents the funds that shareholders invest in the company in exchange for shares of stock. Each type of stock (such as common stock or preferred stock) represents a different claim on the organization's assets and earnings, and thus each type must be represented by a separate owners' equity account to accurately reflect the equity structure of the company.

Each Type of Stock Issued by a Company Represents a Different