Which of the Following Are Classified as Equity Accounts on a Balance

question 47

Multiple Choice

Which of the following are classified as equity accounts on a balance sheet?I. goodwill
II. paid in capital
III. net income
IV. retained earnings

• A)IV only
• B)I and III only
• C)II and IV only
• D)I, II, and IV only
• E)II, III, and IV only

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Definitions:

Ratification

The process of officially sanctioning a treaty or agreement to make it legally binding.

Adoption

The legal process by which an individual assumes the parenting of another, usually a child, from that person's biological or legal parent(s).

Unauthorized Contracts

Unauthorized contracts refer to agreements made by individuals who lack the legal authority or capacity to bind themselves or another party to contractual obligations.

Apparent Authority

A situation where a reasonable person would understand that an agent had authority to act, even if the agent did not have actual authority.