SIE Exam Question 119: Answer and Explanation

Question: 119

What represents the amount of stockholders' capital in a firm?

• A. Assets
• B. Liabilities
• C. Equity
• D. Cash flow

Correct Answer: C

Explanation:

Equity represents the amount of stockholders' capital in a firm. Assets are resources held by the company that have immediate value or that will provide a future benefit. A liability is an obligation, financial or otherwise, that the company owes to a person or business entity. Cash flow is the amount of cash moving into and out of a company.