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Stockholders 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.
Debit
Decrease
Credit
Increase
Decrease
Increase
Decrease
Increase
Decrease
Increase
Increase
Decrease
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Stockholders Equity Accounts with Normal Balances Accounts presented on the Retained Earnings Statement only: Account Title
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. Net Income- This is not an account but is an amount, which is taken from the income statement,s ending balance. 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. 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.
Debit
Decrease
Credit
Increase
N/A
N/A
Increase
Decrease
Decrease
Increase
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 Sales Revenue Service Revenue Rent Revenue Ticket Revenue Interest Revenue Subscription Revenue
MJC Revised 1/2012
Stockholders Equity Accounts with Normal Balances 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 Salaries Expense Depreciation Interest Expense Supplies Expense Rent Expense Utilities Expense Advertising Expense Gas and Oil Expense Travel Expense
Debit Increase Increase Increase Increase Increase Increase Increase Increase Increase
Credit Decrease Decrease Decrease Decrease Decrease Decrease Decrease Decrease Decrease
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