The two major components of the Stockholders' Equity section of the balance sheet are:

Question

Quizplus · Accepted Answer

Paid-in Capital and Retained Earnings are the two major components of the Stockholders' Equity section of a balance sheet. Paid-in Capital represents the amount of capital "paid in" by investors during common or preferred stock issuances, including the excess over par value. Retained Earnings are the portion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

The Two Major Components of the Stockholders' Equity Section of the Balance