The shareholders' equity section is usually divided into which three parts on an ASPE Balance Sheet?
A) Preferred shares, common shares, treasury shares.
B) Preferred shares, common shares, retained earnings.
C) Capital shares, contributed surplus, retained earnings.
D) Capital shares, appropriated retained earnings, unappropriated retained earnings.

Question

Quizplus · Accepted Answer

The shareholders' equity section on an ASPE Balance Sheet is usually divided into three parts: capital shares, contributed surplus, and retained earnings. Capital shares refer to the amount of money that the company raises through issuing shares. Contributed surplus refers to any additional amount that shareholders have contributed to the company beyond the par value of the shares. Retained earnings refer to the portion of the company's profits that are not distributed as dividends and are instead kept for reinvestment in the company. Option A is incorrect because treasury shares are not part of the shareholders' equity section. Option B is incorrect because preferred shares are not always included in the shareholders' equity section. Option D is incorrect because appropriated and unappropriated retained earnings are not standard classifications for the shareholders' equity section.

The Shareholders' Equity Section Is Usually Divided into Which Three