In General,the Order of Reporting Stockholders' Equity on the Balance

question 88

Multiple Choice

In general,the order of reporting stockholders' equity on the balance sheet is:

• A)Common Stock,Preferred Stock,Paid-in Capital in Excess of Par,Retained Earnings,Treasury Stock.
• B)Preferred Stock,Common Stock,Treasury Stock,Paid-in Capital in Excess of Par,Retained Earnings.
• C)Preferred Stock,Common Stock,Paid-in Capital in Excess of Par,Retained Earnings,Treasury Stock.
• D)Retained Earnings,Preferred Stock,Common Stock,Paid-in Capital in Excess of Par,Treasury Stock.

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Definitions:

Cash Flows

The total amount of money being transferred in and out of a business, especially affecting liquidity.

IRR

The Internal Rate of Return; a financial metric used to estimate the profitability of potential investments.

Equivalent Annual Annuity

A financial term referring to the annual cash flow from an investment over its lifespan, adjusted to reflect equal annual payments.

Cost of Capital

The target earnings rate that a company seeks on investments to preserve its value in the market and gather funds.