Which item is included in Shareholders' Equity?

• A. Common stock - par value * stock issued
• B. Accounts payable
• C. Accrued expenses
• D. Deferred revenue

Answer: (A)

Shareholders' Equity reflects the owners' claims after subtracting liabilities from assets. The item that belongs here is common stock recorded at par value times the number of shares issued. This represents ownership in the company and increases equity when shares are issued (the par value portion sits in Common Stock, with any amount above par typically recorded as Additional Paid-In Capital). The other items are not part of equity because they are obligations the company owes: accounts payable is money owed to suppliers, accrued expenses are obligations for expenses incurred but not yet paid, and deferred revenue is cash received before delivering goods or services and is a liability until earned.