Which Item Can Be a Component of Shareholders' Equity

question 29

Multiple Choice

Which item can be a component of shareholders' equity?

• A) share capital
• B) retained earnings
• C) reserves
• D) all of the above

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Definitions:

Price Floor

A government-imposed minimum price charged for a commodity, aimed at preventing prices from falling too low.

Surplus

In economic terms, it refers to the amount by which production, assets, or resources exceed the portion used, often leading to excess supply in markets.

Shortage

A condition where the market's demand for a good or service outstrips its supply.

Price System

An economic mechanism wherein prices act as signals for the allocation of resources, influencing both producers and consumers in their decisions.