Stockholders' equity is generally classified into two major categories:

Question

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Stockholders' equity is generally classified into two major categories: earned capital and contributed capital. Earned capital is primarily represented by retained earnings, which are the profits that have been reinvested in the business rather than distributed to the stockholders. Contributed capital refers to the capital that has been directly invested in the company by the shareholders.

Stockholders' Equity Is Generally Classified into Two Major Categories