The document discusses the stockholder's equity section of a balance sheet. It contains four main elements: paid-in capital, retained earnings, accumulated comprehensive income or loss, and treasury stock. Paid-in capital represents the amount invested by stockholders and includes common stock, preferred stock, and additional paid-in capital. Retained earnings shows the cumulative net earnings retained by the company. Accumulated comprehensive income captures adjustments such as those from currency translation. Treasury stock consists of the company's repurchased shares held for reissuing to employees.

1. General Accounting
Understanding Balance
of Stockholder’s Equity

2. What is a
Balance Sheet?
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• Sums up the financial health of an entity
at a specific financial period by detailing
its assets, liabilities and equity
• Items reported here are measurable,
relevant and reliable
• Contains three elements:
- Assets
- Liabilities
- Stockholder’s equity

3. Stockholder’s
Equity
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• This section on the balance sheet
contains the paid-in capital, retained
earnings, other accumulated
comprehensive income or loss and
treasury stock.
Stockholder’s Equity = Assets - Liabilities

4. Paid-in Capital
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• Contributed capital
• Represents the amount of investment
an owner has in a business
• Amount paid by stockholders in
exchange for shares of ownership
• Classified as common stock, preferred
stock and additional paid-in capital

5. Paid-in Capital
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• Common stock
- Referred as capital stock and represents
retained ownership
• Preferred stock
- Pertains to the dividends or the sharing of
the corporation’s income to its owners
• Additional paid-in capital
- Shows the excess amount obtained by the
owner from selling the preferred stock or
common stock

6. Retained
Earnings
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• Earned capital
• Amount of net earnings of a company
throughout its operations that are not
paid out as dividends
• Gained capital retained for future use

7. Accumulated
Comprehensive
Income or Loss
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• Covers the accruing adjustments in
foreign currency translation; gains or
losses on particular derivative instrument;
latent gains or losses on investments that
are ready to be sold; and variations during
the time in earlier service costs

8. Treasury Stock
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• Corporation’s own stock that has been
issued, fully paid for, repossessed by
the corporation, and retained in its
treasury level for eventual use
• Can be reissued to employees and
executives as bonus or stock
compensation

9. Good fortune is what
happens when
opportunity meets with
planning.
- Thomas Alva Edison
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