Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 38

For the following questions, circle the best response.

Which of the following is normally a contra stockholders’ equity account?

a. Retained Earnings.

b. Treasury Stock.

c. Preferred Stock.

d. Additional Paid-In Capital.

e. None of the above.

Step 1 of 6

(a)

Retained Earnings is not a contra stockholders’ equity account. Stockholders’ Equity appears on the balance sheet and is comprised of Paid-in Capital and Retained Earnings.