_____ is a residual interest or claim-that is, the owners (shareholders) of a firm have a claim on assets not required to meet the claims of creditors.
A)Retained Earnings
B)Shareholders' equity
C)Additional Paid-in-Capital
D)Deficit
E)Par Value

Question

Quizplus · Accepted Answer

Shareholders' equity represents the residual interest or claim that the owners (shareholders) have on the assets of a firm after all of its liabilities are paid off. This includes contributions made by the shareholders, accumulated earnings, and any other adjustments to equity. Retained earnings (A) is a component of shareholders' equity that represents the portion of net income that has been kept by the company instead of distributed as dividends. Additional paid-in-capital (C) represents the amount of money that shareholders have invested in the company above the par value of the stock. Deficit (D) represents a negative retained earnings balance, which can occur when a company incurs losses over time. Par value (E) represents the nominal value of a share of stock, but it is not a component of shareholders' equity.

_____ Is a Residual Interest or Claim-That Is, the Owners