Stockholders' equity includes _____.
A) both preferred stock and common stock
B) total claims
C) additional paid-in capital plus capital surplus
D) total liabilities and total surplus

Question

Quizplus · Accepted Answer

Stockholders' equity includes both preferred stock and common stock, as these are two types of ownership stakes in a company that represent the claims that shareholders have on the company's assets. While additional paid-in capital and capital surplus are components of stockholders' equity, they do not encompass the entirety of it. Total liabilities and total surplus are not components of stockholders' equity at all, but rather represent the sum of a company's obligations and its assets above and beyond those necessary to cover those obligations.

Stockholders' Equity Includes _____