Total Equity amount equals:

Total Equity amount equals:

• A. Stock minus treasury stock
• B. Common stock plus additional paid-in capital
• C. Retained earnings plus other comprehensive income
• D. Bonds payable minus treasury stock

Answer: (A)

Total equity represents the owners’ claim after liabilities are paid, and treasury stock reduces that claim because it’s the company’s own shares repurchased and held. In basic terms, you take the overall stockholders’ equity components (the stock portion before subtracting treasury stock) and subtract treasury stock to get the net total equity. That’s why subtracting treasury stock from stock is the correct way to express total equity. The other options only show parts of equity (such as common stock with additional paid-in capital, or retained earnings with other comprehensive income) or mix in a liability (bonds payable), so they don’t represent the full, net equity.

Total equity represents the owners’ claim after liabilities are paid, and treasury stock reduces that claim because it’s the company’s own shares repurchased and held. In basic terms, you take the overall stockholders’ equity components (the stock portion before subtracting treasury stock) and subtract treasury stock to get the net total equity. That’s why subtracting treasury stock from stock is the correct way to express total equity.

The other options only show parts of equity (such as common stock with additional paid-in capital, or retained earnings with other comprehensive income) or mix in a liability (bonds payable), so they don’t represent the full, net equity.