Question

Put the following accounts in the order in which a corporation should list them on its balance sheet.

A. Retained earnings
B. Preferred stock
C. Additional paid-in capital
D. Common stock

Answer 1

The correct order to list the accounts on a corporation's balance sheet is common stock, preferred stock, additional paid-in capital, and retained earnings.

Step-by-step explanation:

The correct order to list the accounts on a corporation's balance sheet is as follows:

1. Common stock
2. Preferred stock
3. Additional paid-in capital
4. Retained earnings

The reason for this order is that common stock represents the ownership stake of the company's shareholders. Preferred stock is a type of stock that provides certain preferential rights to its holders. Additional paid-in capital refers to the money received from shareholders in excess of the stock's par value. Finally, retained earnings represent the accumulated profits of the company.