Question

The two categories of stockholders' equity usually found on the balance sheet of a corporation are

A) contributed capital and long-term liabilities.
B) contributed capital and property, plant, and equipment.
C) retained earnings and notes payable.
D) contributed capital and retained earnings.
E) None of the above is correct.

Answer 1

D) contributed capital and retained earnings.

Step-by-step explanation:

In the case of the corporation, the balance sheet item i.e stockholder equity i is categorized into two components that includes contributed capital and the retained earning

Contributed capital is also known as the common stock

And, the retained earning at the end of the year is computed below:

= Opening balance of retained earning + net income - dividend paid

These two components are found which are shown above and shown in the liabilities section of the balance sheet