Shareholders' Equity Is Generally Classified into Two Major Categories

question 46

Multiple Choice

Shareholders' equity is generally classified into two major categories:

• A) contributed capital and donated capital.
• B) contributed surplus and retained earnings.
• C) retained earnings and accumulated other comprehensive income.
• D) earned capital and contributed capital.

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Definitions:

New Corporation

A business entity that has recently been formed and incorporated, beginning its operations and legal existence.

Corporate Privilege

Special rights or immunities granted to corporations, often exempting them from certain legal obligations.

Personal Benefit

Advantage or gain obtained by an individual from a situation or transaction, which is often a factor considered in legal judgments.

Implied Power

Powers not explicitly stated but necessary and proper for executing one's official duties or functions.