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Which is not included in the group?Select one:a.retained earningsb.marketable securitiesc.preference sharesd.common shares

Question

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Solution

To determine which option does not belong in the group, let's analyze the provided choices in the context of finance and accounting:

  1. Retained Earnings: This represents the cumulative amount of net income that a company has retained, rather than distributed as dividends. It is part of the equity section of the balance sheet.

  2. Marketable Securities: These are financial instruments that are very liquid and can be quickly converted into cash. They include stocks, bonds, and other investments that are easily tradable.

  3. Preference Shares: These are a type of equity security that has preferential rights over common shares, particularly in dividends and in the event of liquidation.

  4. Common Shares: This represents ownership in a company and entitles shareholders to vote on corporate matters and receive dividends.

Group Analysis

  • Retained earnings, preference shares, and common shares are all components of shareholders' equity.
  • Marketable securities, while they can be considered assets, do not fall under equity; instead, they are classified as current assets on the balance sheet.

Final Answer

b. marketable securities is not included in the group as it represents an asset, while the others represent components of equity.

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