Total stockholders\u2019 equity (in the absence of treasury stock) equals:<\/p>\n\n\n\n
a. Paid-in capital + Additional paid-in capital + Retained earnings.<\/p>\n\n\n\n
b. Paid-in capital +Capital stock + Retained earnings.<\/p>\n\n\n\n
c. Capital stock + Additional paid-in capital – Retained earnings.<\/p>\n\n\n\n
d. Paid in capital + Retained earnings.<\/p>\n\n\n\n
The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n d. Paid-in capital + Retained earnings.<\/strong><\/p>\n\n\n\n Stockholders’ equity represents the residual interest in a company’s assets after deducting its liabilities. It reflects the owners’ claim on the company’s net assets and is a critical component of a company\u2019s balance sheet. In the absence of treasury stock<\/strong>, total stockholders\u2019 equity is determined by summing paid-in capital<\/strong> and retained earnings<\/strong>.<\/p>\n\n\n\n Thus, the most accurate and simplified equation for stockholders\u2019 equity (without treasury stock) is: Total stockholders\u2019 equity (in the absence of treasury stock) equals: a. Paid-in capital + Additional paid-in capital + Retained earnings. b. Paid-in capital +Capital stock + Retained earnings. c. Capital stock + Additional paid-in capital – Retained earnings. d. Paid in capital + Retained earnings. The Correct Answer and Explanation is : Correct Answer: d. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-190802","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/190802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=190802"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/190802\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=190802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=190802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=190802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Correct Answer:<\/h3>\n\n\n\n
Explanation:<\/h3>\n\n\n\n
\n
Paid-in capital (also known as contributed capital) consists of the funds that investors provide to a company in exchange for stock. This includes amounts received from the issuance of common stock and preferred stock. If there is any additional paid-in capital (APIC)<\/strong>, it also forms part of this category, but the key term \u201cpaid-in capital\u201d<\/strong> generally includes all capital contributions from shareholders.<\/li>\n\n\n\n
Retained earnings represent the accumulated profits that a company has earned over time and retained within the business rather than distributing them as dividends. It reflects the company’s profitability and growth, as retained earnings are reinvested into operations, expansion, or other strategic initiatives.<\/li>\n<\/ol>\n\n\n\nWhy the Other Options Are Incorrect:<\/h3>\n\n\n\n
\n
Stockholders’ Equity = Paid-in Capital + Retained Earnings.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"