Two Classifications Appearing in the Share Capital Section of the Statement

question 66

Multiple Choice

Two classifications appearing in the share capital section of the statement of financial position are

• A)dividends payable and dividends distributable.
• B)share capital and retained earnings.
• C)preferred shares and common shares.
• D)contributed capital and retained earnings.

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Definitions:

Accounting Profit

The total revenue of a business minus the explicit costs of operating, not including opportunity costs.

Implicit Costs

The opportunity costs that are not directly paid out but represent the loss of potential income from using resources in a certain way.

Opportunity Costs

Missing out on possible advantages from other choices by opting for a particular alternative.

Externalities

Spillover effects of an activity that influence the well-being of nonconsenting parties.