Stockholders' equity consists of which of the following?
A)Long-term assets.
B)Paid-in capital and retained earnings.
C)Paid-in 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, after deducting its liabilities. It consists of two main components - paid-in capital and retained earnings. Paid-in capital refers to the amount of capital that has been contributed by the shareholders through the issuance of stock. Retained earnings, on the other hand, represent the company's earnings that have been reinvested back into the business over time. Therefore, choice B - paid-in capital and retained earnings - is the correct answer.

Stockholders' Equity Consists of Which of the Following