Asked by Rivaldo English on Apr 28, 2024
Verified
Stockholders' equity consists of paid-in capital and retained earnings.
Paid-in Capital
The amount of capital provided by shareholders in exchange for shares of stock during the initial offering or through subsequent stock offerings.
Retained Earnings
The portion of a business's profits not distributed to shareholders but instead reinvested in the business or kept as reserve.
- Absorb the core ideas and outcomes of corporate financial statements and shareholder equity.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
True
Explanation :
Stockholders' equity is the portion of a company's balance sheet that represents the total amount of money that investors have contributed to the company, either through the purchase of stock or through the reinvestment of earnings. This equity is divided into two categories: paid-in capital (the amount of money that investors have contributed) and retained earnings (the company's profits that have been retained for reinvestment rather than paid out as dividends).
Learning Objectives
- Absorb the core ideas and outcomes of corporate financial statements and shareholder equity.