Stockholders’ Equity Accounts For The Year 2023

Get Your First Month of Bookkeeping Services for FREE!







Stockholders’ equity refers to money invested in a business, both at startup and after. Stockholders’ equity accounts are viewable on the business’s balance sheet, chart of accounts, and general ledger, and detail donated capital, paid-in capital, and retained earnings.

Paid-in capital, or permanent capital, refers to amounts paid to a corporation when stock shares were issued. Paid-in capital details funds raised from equity, not from ongoing operations. While all corporations have common stock, only a few have preferred stock as well.

A common stock account details the par/stated value of common stock issued shares, if the stock has a par/stated value. If the stock has neither, this account records the whole amount received by a corporation.

Common stock issued by a corporation, minus the par/stated value, is recorded in a Paid-in Capital in Excess of Par Value- Common Stock account.

A corporation’s retained earnings are parts of net income which is kept by that corporation instead of sent to shareholders. A retained earnings account details cumulative earnings while subtracting cumulative dividends paid to shareholders. Therefore, earnings are added to this account, while dividends are subtracted.

Get Your First Month of Bookkeeping for FREE!