Which of the Following Accounts Does NOT Belong in the Equity

question 54

Multiple Choice

Which of the following accounts does NOT belong in the equity section of a balance sheet?

• A) retained earnings
• B) paid-in-surplus
• C) long-term debt
• D) preferred stock

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Definitions:

Consideration

The value (usually monetary) that is given in exchange for goods, services, or an obligation in a contract.

Transaction Price

The price agreed upon by a buyer and seller for the exchange of goods or services, often noted in a contract.

Promised Goods

Goods that a seller has agreed to deliver to a buyer under a contract or sales agreement.

Consignment

A business arrangement in which goods are entrusted to a third party to sell, with payment occurring only after the sale.