Question

Equity of a corporation is broken out into two components. which of the following are the two components of the equity of a corporation?

-common stock and liabilities
-currents assets and fixed assets
-revenues and expenses
-contributed capital and retained earnings

Answer 1

The equity of a corporation consists of two components: contributed capital and retained earnings. These reflect the shareholders' investments and reinvested profits respectively.

Step-by-step explanation:

The equity of a corporation is broken out into two components: contributed capital and retained earnings. Contributed capital reflects the money that shareholders invest in exchange for stock, while retained earnings represent the cumulative profits of the corporation that have been reinvested in the business and not paid out as dividends. These two components are critical for understanding a corporation’s financial health and owner’s equity.