Which of the Following Are the Three Basic Elements of the Balance

question 15

Multiple Choice

Which of the following are the three basic elements of the balance sheet?

• A)assets,liabilities,and retained earnings.
• B)assets,liabilities,and contributed capital.
• C)assets,liabilities,and revenues.
• D)assets,liabilities,and stockholders' equity.

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Definitions:

Market Value

The going rate for an asset or service available for exchange in the open market.

Equity

The value of an asset after deducting the value of liabilities, representing ownership interest in a company or property.

Cost of Capital

The rate of return that a company must earn on its project investments to maintain its market value and attract funds.

Debt/Equity Ratio

A fiscal ratio that reflects the comparative amount of equity from shareholders and borrowed funds utilized to support a company's resources.