Shareholders' equity consists of:

Question

Quizplus · Accepted Answer

Shareholders' equity is the residual interest in the assets of an entity after deducting liabilities. It is mainly composed of two components, paid-in capital and retained earnings. Paid-in capital represents the amount of money shareholders have contributed to the company while retained earnings represent the accumulated profits of the company that have not been distributed as dividends. Long-term assets and cash are not part of shareholders' equity, and premiums and discounts are not common components of shareholders' equity. Par value may be included in the calculation of paid-in capital, but it is not a separate component of shareholders' equity.

Shareholders' Equity Consists Of