Stockholders' equity consists of:
A) additional paid-in capital, which is equal to the par value of the stock.
B) treasury stock, which represents stock of another corporation that the company has purchased.
C) accumulated other comprehensive income, which represents items of gain or loss that bypass the income statement.
D) common stock, which is recorded at its market value.

Question

Quizplus · Accepted Answer

Stockholders' equity consists of several components, including common stock, additional paid-in capital, retained earnings, and accumulated other comprehensive income. Accumulated other comprehensive income represents items of gain or loss that bypass the income statement, such as unrealized gains or losses on available-for-sale securities or foreign currency translation adjustments. Therefore, choice C is the correct answer.

Choices A, B, and D are incorrect. Additional paid-in capital is not equal to the par value of the stock but rather represents the excess of the amount paid for the stock over its par value. Treasury stock represents the company's own stock that has been repurchased and is deducted from stockholders' equity. Common stock is typically recorded at its par value, not its market value.

Stockholders' Equity Consists Of