What are the stockholders’ equity accounts?
The stockholders’ equity accounts are balance sheet accounts and a part of the accounting equation Assets = Liabilities + Stockholders’ Equity. In this light you can view the stockholders’ equity accounts (along with the liability accounts) as sources of the amounts reported in the asset accounts.
If the source of an asset was an investor purchasing new shares of common stock, the corporation would credit the stockholders’ equity account Common Stock and perhaps Paid-in Capital in Excess of Par–Common Stock, or Premium on Common Stock. If the source of an asset was an investor purchasing new shares of preferred stock, the corporation would credit the stockholders’ equity account Preferred Stock and perhaps Paid-in Capital in Excess of Par–Preferred Stock, or Premium on Preferred Stock.
If the source of an asset was the net income earned by the corporation, the stockholders’ equity account Retained Earnings would be credited. If a corporation reduces its assets by purchasing its stock from its stockholders, the contra-stockholders’ equity account Treasury Stock is debited.
Learn more about Stockholders’ Equity.
About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years.He is the author of the 2010 Master Accounting Download Package which has been praised for it's ability to simplify accounting in a way that anybody can understand.
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stockholder’s equity accounts are the balance sheet account and are part of the accounting equation Asset=liability+stockholder equity is mostly for coporation while owner’s equity are for the sole-properitor…and are said to be the Capital account that is the money use or kept aside in starting a business……so if we talk of stockholder equity is the amount used in starting up the coporation or is the Cappital Account. or could also be pay-in excess in capital..
Could you give me more guidence in M.Com Ist Year Financial Management Lesson Capital Budgetin.
I would be very greatful to you.
good work but still i need ur your help pliz to kniow what equity means in accounts.
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