Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

12. Stockholders' Equity

Retained Earnings

Financial Accounting

12. Stockholders' Equity

Retained Earnings

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Multiple Choice

Which of the following items are components of shareholders' equity on a corporation's balance sheet?

Common stock

Retained earnings

Accounts payable

Bonds payable

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Verified step by step guidance

Understand the concept of shareholders' equity: Shareholders' equity represents the owners' claim on the assets of a corporation after all liabilities have been deducted. It is a key section of the balance sheet.

Identify the components of shareholders' equity: Common components include common stock, preferred stock, retained earnings, and additional paid-in capital. These items reflect the ownership interest and accumulated profits of the corporation.

Analyze the given items: Common stock and retained earnings are part of shareholders' equity because they represent ownership interest and accumulated profits, respectively. Accounts payable and bonds payable, however, are liabilities and not part of shareholders' equity.

Classify each item: Common stock is equity issued to shareholders, retained earnings are profits retained in the business, accounts payable are short-term liabilities, and bonds payable are long-term liabilities.

Conclude the correct components: Based on the analysis, the correct components of shareholders' equity on the balance sheet are common stock and retained earnings.