Which of the following is an account in stockholders' equity?

Question

Quizplus · Accepted Answer

Retained Earnings is an account in stockholders' equity which represents the cumulative earnings of a company since its inception, net of any dividends distributed to shareholders.

The other options, A) Dividends Payable and B) Loss on Sale of Equipment, are not accounts in stockholders' equity. Dividends Payable is a liability account that reflects the amount of dividends declared by a company but not yet paid to shareholders. Loss on Sale of Equipment is a temporary account that is used to record the loss incurred by a company when it sells an asset at a lower price than its book value.

D) Net Income is also not an account in stockholders' equity, but rather a measure of profitability that represents the difference between a company's revenues and expenses for a period of time. However, Net Income does affect Retained Earnings since it is added to Retained Earnings if positive and subtracted if negative.

Which of the Following Is an Account in Stockholders' Equity