Question

Total stockholders' equity represents

a. a claim to specific assets contributed by the owners.
b. the maximum amount that can be borrowed by the enterprise.
c. a claim against a portion of the total assets of an enterprise.
d. only the amount of earnings that have been retained in the business.

Answer 1

Answer: Option C

Step-by-step explanation: In simple words, the amount of assets that remain in the business after all liabilities have been met is called the stockholders equity. These are the funds available in the company on which the common stockholders have their right.

In other words, these are the assets which are financed by the owners of the company and no liability is incurred to purchase them.

Hence from the above we can conclude that the correct option is C.