The Two Primary Sources of Equity Shown in a Balance

question 1

Multiple Choice

The two primary sources of equity shown in a balance sheet are:

• A)Residual equity and debt equity.
• B)Capital equity and residual equity.
• C)Contributed capital and earned capital.
• D)Unearned capital and earned capital.

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Definitions:

Future Value

The value of a current asset at a specified date in the future based on an assumed rate of growth.

Deposits

Money placed into a financial institution for safekeeping, which may earn interest over time.

Investment Plan

A financial strategy designed to help individuals allocate their capital towards investment vehicles with the aim of generating future profits.

Present Value

The present value of an anticipated amount of money or sequence of financial inflows, discounted by a particular return rate.