Statement of Changes in Equity

The statement of changes in equity is one of the main financial statements. The purpose of the statement is to show the equity movements during the accounting period and to reconcile the beginning and ending equity balances.

Last modified June 12th, 2019 by Michael Brown
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Treasury Stock Cost Method Journal Entries

The treasury stock cost method journal entries below act as a quick reference, and set out the most commonly encountered situations when accounting for treasury stock using the cost method.

In each case the journal entries show the debit and credit account together with a brief narrative.

Last modified April 30th, 2019 by Michael Brown
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Dividends

A dividend is a payment of a share of the profits of a corporation to its shareholders.

A dividend declared is a liability of the business on the dividend declaration date which becomes payable on the dividend payment dates.

Last modified April 18th, 2019 by Michael Brown
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Stockholders Equity Journal Entries

The stockholders equity journal entries below act as a quick reference, and set out the most commonly encountered situations when dealing with the double entry posting of stock holders equity.

In each case the journal entries show the debit and credit account together with a brief narrative.

Last modified April 8th, 2019 by Michael Brown
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Relationship Between Balance Sheet and Income Statement

The relationship between the balance sheet and income statement is that the profit of the business shown in the income statement, belongs to the owners and this is shown by a movement in equity between the opening and closing balance sheets of the business.

Last modified April 8th, 2019 by Michael Brown
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Drawings Accounting

Drawings accounting is used when an owner of a business wants to withdraw cash for private use. The bookkeeping entries are recorded on the drawings account.

If for example an owner takes 200 cash from the business for their own use, then the drawings accounting would be as follows:

Last modified April 8th, 2019 by Michael Brown
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Owners Equity, Capital and Retained Earnings

Owners Equity is that part of your business finance which is provided by the owners. Owners Equity includes two main components Capital which is invested as cash or cash equivalents by the owners as acapital introduction and Reserves which represent mainly profits of the business which have not been distributed to the owners.

Last modified April 3rd, 2019 by Michael Brown
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Capital Introduction

When you start your business you need a capital introduction. Suppose for example you start by depositing 1,000 cash into a business bank account.

Last modified April 2nd, 2019 by Michael Brown
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