A primary source of stockholders' equity is
A) income retained by the corporation.
B) appropriated retained earnings.
C) contributions by stockholders.
D) both income retained by the corporation and contributions by stockholders.

Question

Quizplus · Accepted Answer

Stockholders' equity is the residual interest in the assets of the corporation after deducting liabilities. The two primary sources of stockholders' equity are contributions by stockholders and income retained by the corporation. Appropriated retained earnings are not considered a primary source of stockholders' equity, as they represent a portion of retained earnings designated for specific purposes by management.

A Primary Source of Stockholders' Equity Is