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Question

Question
Equity is composed of contributed capital and

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Lucas

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Answer

Retained Earnings.

Explanation

In the context of business, "Equity" refers to the residual interest in the assets of a company or entity that is left after deducting liabilities. This includes both original investment, which is also known as "contributed capital," as well as retained earnings, which is the profit that has been retained by the company instead of being distributed to shareholders as dividends. Contributed capital and retained earnings combined contribute to the distinction of equity. Hence according to the generally accepted accounting principles, equity is classified into two spheres - Contributed Capital and Retained Earnings.

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