The two categories of stockholders' equity usually found in the balance sheet of a corporation are:
A)Common stock and liabilities.
B)Assets and liabilities.
C)Common stock and retained earnings.

Question

Quizplus · Accepted Answer

The two categories of stockholders' equity usually found in the balance sheet of a corporation are common stock and retained earnings. Common stock represents the initial investment made by stockholders, while retained earnings represent the accumulated profits of the corporation that have been kept for the company's use rather than distributed to stockholders as dividends. Assets and liabilities are separate categories altogether and are not part of stockholders' equity. Common stock and liabilities are also not the correct answer as they are two different categories, one representing investment and the other representing debts owed by the corporation.

The Two Categories of Stockholders' Equity Usually Found in the Balance