The two main categories of stockholders’ equity are a. assets and liabilities. b. retained earnings and common stock. c. common stock and preferred stock . d. retained earnings and paid-in capital.

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 10, Problem 1QC

The two main categories of stockholders’ equity are

a. assets and liabilities.
b. retained earnings and common stock.
c. common stock and preferred stock.
d. retained earnings and paid-in capital.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

To identify: The two main categories of stockholders’ equity.

Answer to Problem 1QC

d. retained earnings and paid in capital.

Explanation of Solution

The two main categories of stockholders’ equity are paid-in capital and retained earnings which are explained below:

Paid-in capital refers to the amount paid by the investors on common stock and preferred stock issued to them.

Retained earnings refers to the amount of earnings that are not paid as dividends to the stockholders rather kept by the corporation for reinvestments, payment of debts, and future growth.

Justification for incorrect options:

“Option a” is not a correct answer, because both assets and liabilities are not the categories of stockholders’ equity. Both assets and liabilities are the components of balance sheet like stockholders’ equity.

“Option b” is partly correct; however it is not exact answer. Common stock is not a main category of stockholders’ equity, because paid in capital is the main category of stockholders’ equity, and the common stock will be reported under the category of paid in capital.

“Option c” is partly correct; however it is not an exact answer, because both common stock and preferred stock will be sub-categorized under the main category of paid in capital. Another main category of stockholders’ equity is retained earnings.

Justification for correct answer:

“Option d” is a correct answer, because both the paid in capital and retained earnings are the main categories of stockholders’ equity.

Thus, the correct answer is option d. retained earnings and paid-in capital.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Please add on to it and expand please.

Please provide the accurate answer to this general accounting problem using appropriate methods.

None

Answer 2

Textbook Question

Chapter 10, Problem 1QC

The two main categories of stockholders’ equity are

a. assets and liabilities.
b. retained earnings and common stock.
c. common stock and preferred stock.
d. retained earnings and paid-in capital.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

To identify: The two main categories of stockholders’ equity.

Answer to Problem 1QC

d. retained earnings and paid in capital.

Explanation of Solution

The two main categories of stockholders’ equity are paid-in capital and retained earnings which are explained below:

Paid-in capital refers to the amount paid by the investors on common stock and preferred stock issued to them.

Retained earnings refers to the amount of earnings that are not paid as dividends to the stockholders rather kept by the corporation for reinvestments, payment of debts, and future growth.

Justification for incorrect options:

“Option a” is not a correct answer, because both assets and liabilities are not the categories of stockholders’ equity. Both assets and liabilities are the components of balance sheet like stockholders’ equity.

“Option b” is partly correct; however it is not exact answer. Common stock is not a main category of stockholders’ equity, because paid in capital is the main category of stockholders’ equity, and the common stock will be reported under the category of paid in capital.

“Option c” is partly correct; however it is not an exact answer, because both common stock and preferred stock will be sub-categorized under the main category of paid in capital. Another main category of stockholders’ equity is retained earnings.

Justification for correct answer:

“Option d” is a correct answer, because both the paid in capital and retained earnings are the main categories of stockholders’ equity.

Thus, the correct answer is option d. retained earnings and paid-in capital.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 10, Problem 1QC

The two main categories of stockholders’ equity are

a. assets and liabilities.
b. retained earnings and common stock.
c. common stock and preferred stock.
d. retained earnings and paid-in capital.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

To identify: The two main categories of stockholders’ equity.

Answer to Problem 1QC

d. retained earnings and paid in capital.

Explanation of Solution

The two main categories of stockholders’ equity are paid-in capital and retained earnings which are explained below:

Paid-in capital refers to the amount paid by the investors on common stock and preferred stock issued to them.

Retained earnings refers to the amount of earnings that are not paid as dividends to the stockholders rather kept by the corporation for reinvestments, payment of debts, and future growth.

Justification for incorrect options:

“Option a” is not a correct answer, because both assets and liabilities are not the categories of stockholders’ equity. Both assets and liabilities are the components of balance sheet like stockholders’ equity.

“Option b” is partly correct; however it is not exact answer. Common stock is not a main category of stockholders’ equity, because paid in capital is the main category of stockholders’ equity, and the common stock will be reported under the category of paid in capital.

“Option c” is partly correct; however it is not an exact answer, because both common stock and preferred stock will be sub-categorized under the main category of paid in capital. Another main category of stockholders’ equity is retained earnings.

Justification for correct answer:

“Option d” is a correct answer, because both the paid in capital and retained earnings are the main categories of stockholders’ equity.

Thus, the correct answer is option d. retained earnings and paid-in capital.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 10, Problem 1QC

The two main categories of stockholders’ equity are

a. assets and liabilities.
b. retained earnings and common stock.
c. common stock and preferred stock.
d. retained earnings and paid-in capital.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

To identify: The two main categories of stockholders’ equity.

Answer to Problem 1QC

d. retained earnings and paid in capital.

Explanation of Solution

The two main categories of stockholders’ equity are paid-in capital and retained earnings which are explained below:

Paid-in capital refers to the amount paid by the investors on common stock and preferred stock issued to them.

Retained earnings refers to the amount of earnings that are not paid as dividends to the stockholders rather kept by the corporation for reinvestments, payment of debts, and future growth.

Justification for incorrect options:

“Option a” is not a correct answer, because both assets and liabilities are not the categories of stockholders’ equity. Both assets and liabilities are the components of balance sheet like stockholders’ equity.

“Option b” is partly correct; however it is not exact answer. Common stock is not a main category of stockholders’ equity, because paid in capital is the main category of stockholders’ equity, and the common stock will be reported under the category of paid in capital.

“Option c” is partly correct; however it is not an exact answer, because both common stock and preferred stock will be sub-categorized under the main category of paid in capital. Another main category of stockholders’ equity is retained earnings.

Justification for correct answer:

“Option d” is a correct answer, because both the paid in capital and retained earnings are the main categories of stockholders’ equity.

Thus, the correct answer is option d. retained earnings and paid-in capital.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

To identify: The two main categories of stockholders’ equity.

Answer to Problem 1QC

d. retained earnings and paid in capital.

Explanation of Solution

The two main categories of stockholders’ equity are paid-in capital and retained earnings which are explained below:

Paid-in capital refers to the amount paid by the investors on common stock and preferred stock issued to them.

Retained earnings refers to the amount of earnings that are not paid as dividends to the stockholders rather kept by the corporation for reinvestments, payment of debts, and future growth.

Justification for incorrect options:

“Option a” is not a correct answer, because both assets and liabilities are not the categories of stockholders’ equity. Both assets and liabilities are the components of balance sheet like stockholders’ equity.

“Option b” is partly correct; however it is not exact answer. Common stock is not a main category of stockholders’ equity, because paid in capital is the main category of stockholders’ equity, and the common stock will be reported under the category of paid in capital.

“Option c” is partly correct; however it is not an exact answer, because both common stock and preferred stock will be sub-categorized under the main category of paid in capital. Another main category of stockholders’ equity is retained earnings.

Justification for correct answer:

“Option d” is a correct answer, because both the paid in capital and retained earnings are the main categories of stockholders’ equity.

Thus, the correct answer is option d. retained earnings and paid-in capital.

Answer 8

Expert Solution & Answer

To determine

To identify: The two main categories of stockholders’ equity.

Answer to Problem 1QC

d. retained earnings and paid in capital.

Explanation of Solution

The two main categories of stockholders’ equity are paid-in capital and retained earnings which are explained below:

Paid-in capital refers to the amount paid by the investors on common stock and preferred stock issued to them.

Retained earnings refers to the amount of earnings that are not paid as dividends to the stockholders rather kept by the corporation for reinvestments, payment of debts, and future growth.

Justification for incorrect options:

“Option a” is not a correct answer, because both assets and liabilities are not the categories of stockholders’ equity. Both assets and liabilities are the components of balance sheet like stockholders’ equity.

“Option b” is partly correct; however it is not exact answer. Common stock is not a main category of stockholders’ equity, because paid in capital is the main category of stockholders’ equity, and the common stock will be reported under the category of paid in capital.

“Option c” is partly correct; however it is not an exact answer, because both common stock and preferred stock will be sub-categorized under the main category of paid in capital. Another main category of stockholders’ equity is retained earnings.

Justification for correct answer:

“Option d” is a correct answer, because both the paid in capital and retained earnings are the main categories of stockholders’ equity.

Thus, the correct answer is option d. retained earnings and paid-in capital.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

To identify: The two main categories of stockholders’ equity.

Answer 12

Answer to Problem 1QC

d. retained earnings and paid in capital.

Answer 13

Explanation of Solution

The two main categories of stockholders’ equity are paid-in capital and retained earnings which are explained below:

Paid-in capital refers to the amount paid by the investors on common stock and preferred stock issued to them.

Retained earnings refers to the amount of earnings that are not paid as dividends to the stockholders rather kept by the corporation for reinvestments, payment of debts, and future growth.

Justification for incorrect options:

“Option a” is not a correct answer, because both assets and liabilities are not the categories of stockholders’ equity. Both assets and liabilities are the components of balance sheet like stockholders’ equity.

“Option b” is partly correct; however it is not exact answer. Common stock is not a main category of stockholders’ equity, because paid in capital is the main category of stockholders’ equity, and the common stock will be reported under the category of paid in capital.

“Option c” is partly correct; however it is not an exact answer, because both common stock and preferred stock will be sub-categorized under the main category of paid in capital. Another main category of stockholders’ equity is retained earnings.

Justification for correct answer:

“Option d” is a correct answer, because both the paid in capital and retained earnings are the main categories of stockholders’ equity.

Thus, the correct answer is option d. retained earnings and paid-in capital.

Answer 14

Ch. 10 - The two main categories of stockholders equity are...Ch. 10 - Prob. 2QC Ch. 10 - Stockholders of a corporation directly elect the...Ch. 10 - The par value of a share of common stock a. is...Ch. 10 - Prob. 5QC Ch. 10 - If a corporation issues 1,000 shares of 1 par...Ch. 10 - Prob. 7QC Ch. 10 - Sandusky Corporation purchased 3,000 shares of its...Ch. 10 - Graves Corporation issued 50,000 shares of 1 par...Ch. 10 - Prob. 10QC

The two main categories of stockholders’ equity are a. assets and liabilities. b. retained earnings and common stock. c. common stock and preferred stock . d. retained earnings and paid-in capital.

Concept explainers

Videos

Answer to Problem 1QC

Explanation of Solution

Want to see more full solutions like this?

Chapter 10 Solutions