Stock Option Compensation Accounting

Stock options are a form of equity based compensation. When a business purchases the services of key personnel and pays for those services using stock options, it must record the expense in the income statement over the vesting period using stock based compensation accounting journal entries.

Stock Option Compensation Accounting August 30th, 2017Team
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Preferred Stock Equity

What is preferred stock ? Preferred stock is a type of equity which gives stockholders additional benefits (preferences). The main benefit is that the preference stockholders are entitled to dividends and repayment of their investment on liquidation before any payments are made to common stockholders.

Preferred Stock Equity June 15th, 2017Team
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Preferred Stock Journal Entries

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

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

Preferred Stock Journal Entries November 6th, 2016Team
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How to Value a Stock

The present value of a growing perpetuity formula is used to calculate the present value of a series of periodic payments which increase at a constant rate each period. The formula can be used as the basis for the Gordon growth model when considering how to value shares and stocks.

How to Value a Stock November 6th, 2016Team
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Stock Split

A stock split is used to reduce the market price of the capital stock of a business in order to make it more attractive to investors, and increase demand.

Stock Split November 6th, 2016Team
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Non-Cash Capital Introduction

It is often the case, particularly with a start up business, that there will be a non-cash capital introduction in which the business will issue equity in return for non-cash assets such as property, plant, and equipment or supplies and inventory.

Non-Cash Capital Introduction September 21st, 2017Team
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Dividends Declared Journal Entry

When a business declares a dividend part of the retained earnings of the business are distributed to the owners. The impact on the accounting equation is to increase the dividends payable liability and decrease the owners equity is the business.

Dividends Declared Journal Entry November 6th, 2016Team
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Capital Stock Accounting

For a business which is operated through a company or corporation, the equity is referred to as shareholders’ equity and the capital introduced is referred to as capital stock or share capital, and represents ownership in the company or corporation. This ownership also gives the stockholder a right to a share in the retained earnings of the business.

Capital Stock Accounting August 30th, 2017Team
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Statement of Comprehensive Income

The statement of comprehensive income is one of the main financial statements. The purpose of the statement of comprehensive income is to show all changes in equity other than those resulting from investments by and distributions to the owners of the business.

Statement of Comprehensive Income November 6th, 2016Team
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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.

Statement of Changes in Equity June 19th, 2017Team
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