Stockholders' equity,also called shareholders' equity,includes which of the following two accounts?
A)Common stock and Deferred revenue.
B)Common stock and Retained earnings.
C)Liabilities and Retained earnings.
D)Retained earnings and Cash.

Question

Quizplus · Accepted Answer

Stockholders' equity includes both common stock (which represents the initial investment by shareholders) and retained earnings (which represents the cumulative net income of the company that has not been distributed as dividends). Therefore, the correct answer is choice B, which includes both common stock and retained earnings. Choice A is incorrect because deferred revenue is a liability account, not a stockholders' equity account. Choice C is incorrect because liabilities are not part of stockholders' equity. Choice D is incorrect because cash is an asset account, not a stockholders' equity account.

Stockholders' Equity,also Called Shareholders' Equity,includes Which of the Following Two