Question

Stockholder’s equity is divided into which two parts?

a) cash and inventories
b) long-term investments and short-term liabilities
c) common stock and retained earnings
d) intangible assets and plant, property, and equipment

Answer 1

Answer: Option C

Step-by-step explanation: In simple words, the amount of assets that remain in the hands of the company after all the liabilities and obligations are met is called the stockholders equity. It is the amount of funds in the company on which the owners have their right.

The stockholders equity is divided into two parts, common stock and retained earnings. Common stock is the amount of shares of the company that are owned by the individuals. Retained earnings refers to the amount of profit left with the company after paying all dividends and interest.