The Two Basic Sources of Stockholders' Equity Are ________

question 31

Multiple Choice

The two basic sources of stockholders' equity are ________.

• A) common stock and bonds
• B) common stock and preferred stock
• C) paid-in capital and retained earnings
• D) no-par and stated value stock

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Definitions:

Retained Earnings

The accumulated net income of a company that has not been distributed to shareholders as dividends.

Paid-in Capital

Funds raised by a company through the issuance of shares to shareholders, representing the funding the company has received from equity rather than from ongoing operations.

Stockholders' Equity

The ownership interest of stockholders in a company, represented by the company's assets minus liabilities.

Treasury Stock

Refers to shares that were once part of the outstanding shares and have been bought back by the issuing company, reducing the amount of stock on the open market.