Stockholders' equity consists of:
A)Long-term assets.
B)Contributed capital and retained earnings.
C)Contributed capital and par value.
D)Retained earnings and cash.
E)Premiums and discounts.

Question

Quizplus · Accepted Answer

Stockholders' equity represents the residual interest in the assets of a company, and it consists of two main components: contributed capital and retained earnings. Contributed capital refers to the amount of capital that shareholders have invested in the company through the issuance of stock, while retained earnings represent the accumulated profits of the company that have not been distributed as dividends. Therefore, choice B, which includes both contributed capital and retained earnings, is the correct answer.

Stockholders' Equity Consists Of