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This is a list of some common stockholders' Equity accounts.
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Stockholder’s Equity Accounts with Normal Balances
MJC Revised 1/2012 Page 1
Stockholder’s Equity Accounts can be broken down into
two groups, which are money invested by the owners of
the company and money brought into the business in the
course of performing its own business activities. These
accounts do not represent physical assets but are a record
keeping of how the company received its money to invest
in company assets.
Accounts presented on the Balance Sheet only:
Account Title Debit Credit
Common Stock- is to represent money invested by the
owners which includes voting rights at stockholders’
meetings. Recorded at par or stated value at the time of
sale.
Decrease Increase
Preferred Stock-is to represent money invested by the
owners which does not usually entitle voting rights to
stockholders but has other rights to dividends. Recorded at
par or stated value at the time of sale
Decrease Increase
Paid-in Capital in excess of (par or stated) value-
Money received from investors that exceed the par or
stated value of the stock.
Decrease Increase
Retained Earnings- represents the past income that was
retained in the company as either an asset or cash in the
bank.
Decrease Increase
Treasury Stock- is the company’s own stock that was
repurchased for the open markets. This account is
considered a contra equity account since it reduces the
value of the stockholders’ equity section of the balance
sheet.
Increase Decrease
Stockholder’s Equity Accounts with Normal Balances
MJC Revised 1/2012 Page 2
Accounts presented on the Retained Earnings Statement only:
Account Title Debit Credit
Retained Earnings, 1/1/00-Beginning of the fiscal period for which the statement is being prepared. Normal balance is on the credit side of the account.
Decrease Increase
Net Income- This is not an account but is an amount, which is taken from the income statement,’s ending balance.
N/A N/A
Dividends- are the amount of money paid out during the year to owners. This account has a debit normal balance and is considered to be a contra equity accounts.
Increase Decrease
Retained Earnings, 12/31/00-Ending of the fiscal period for which the statement is being prepared. Normal balance is on the credit side of the account and final total is then transferred onto the balance sheet.
Decrease Increase
Accounts presented on the Income Statement only:
Revenues- Section heading only- is any money earned by
performing either services or sales. These accounts have a
normal balance on the credit side and increase the retained
earnings accounts
Account Title Debit Credit
Sales Revenue Decrease Increase
Service Revenue Decrease Increase
Rent Revenue Decrease Increase
Ticket Revenue Decrease Increase
Interest Revenue Decrease Increase
Subscription Revenue Decrease Increase
Stockholder’s Equity Accounts with Normal Balances
MJC Revised 1/2012 Page 3
Accounts presented on the Income Statement only:
Expenses-Section heading only- these are the cost incurred
to produce income for the business. Because expenses
reduce Retained Earnings these accounts have a normal
balance of a debit.
Expenses are subtracted from revenues in order to come up with net income which is then transferred
onto the Retained Earnings Statement. The ending retained earnings is then transferred from the
Retained Earnings Statement onto the balance sheet.
Account Title Debit Credit
Salaries Expense Increase Decrease
Depreciation Increase Decrease
Interest Expense Increase Decrease
Supplies Expense Increase Decrease
Rent Expense Increase Decrease
Utilities Expense Increase Decrease
Advertising Expense Increase Decrease
Gas and Oil Expense Increase Decrease
Travel Expense Increase Decrease
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