Stockholders' equity consists 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 is the residual interest in the assets of a company after liabilities are deducted. It consists of two main components: Paid-in capital, which represents the amount of capital contributed by the shareholders, and retained earnings, which represents the accumulated profits of the company that have not been distributed to the shareholders as dividends. Par value and premiums/discounts are components of paid-in capital. Long-term assets and cash are not part of stockholders' equity.

Stockholders' Equity Consists of the Following