Shareholders' Equity Consists of What Three Components

question 10

Multiple Choice

Shareholders' equity consists of what three components:

• A) Assets, liabilities, and contributed capital.
• B) Contributed capital, accumulated other comprehensive income, and retained earnings.
• C) Liabilities, contributed capital, and retained earnings.
• D) Liabilities, contributed capital, and accumulated other comprehensive income.

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Definitions:

Upward-Sloping

Describes a line on a graph that demonstrates an increase in value as it moves to the right, often used to represent increases in costs or prices.

Diseconomies of Scale

Diseconomies of scale occur when a company or business grows so large that the costs per unit increase, leading to decreased efficiency.

Diminishing Marginal Returns

A principle stating that as additional units of a variable input are added to a fixed input, the additional output produced from each new unit will eventually decrease.

Normal Profit

The minimum level of profit needed for a company to remain competitive in the market, covering its opportunity costs.