To explain: The meaning of stockholder’ equity.
Answer to Problem 15.1Q
Stockholders’ equity refers to the amount of share of the stockholders in the company’s assets. It refers to the aggregate amount after the distinction between the assets and liabilities of a company.
Explanation of Solution
Stockholders’ Equity:
Stockholders’ equity or also referred to as the shareholders’ equity in a company is the total share of a shareholder in the company’s assets after all the liabilities of the company are paid off. A stockholder owns the retained
Retained earnings : It refers to the amount of profit which is shared among the stockholders’ of the company from the total profit earned in a given accounting year.- Capital accounted: The total amount of capital a shareholder accounts in the company or has given as investment in the company refers to the capital accounted for by the shareholder.
- Accumulated income: Another source of income (or loss) for the shareholder can be from the revaluation done of different assets and liabilities in the company that results to build accumulated or comprehensive capital in the company.
Therefore, the stockholders’ are in a way the owner in the company up to the amount of capital invested.
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