The two basic sources of stockholders' equity are:
A)common stock and bonds.
B)common stock and preferred stock.
C)paid-in capital and retained earnings.
D)loans from banks and gifts from donors.

Question

Quizplus · Accepted Answer

The two basic sources of stockholders' equity are paid-in capital and retained earnings. Paid-in capital is the money that shareholders have invested in the company by purchasing stocks. Retained earnings are the profits that the company has earned and kept over time, rather than distributing them as dividends to shareholders. Common stock, preferred stock, bonds, loans from banks, and gifts from donors may all contribute to stockholders' equity, but they are not the two basic sources.

The Two Basic Sources of Stockholders' Equity Are