Shareholder’s Equity

Shareholder’s equity is the residual claim on assets after settling claims of creditors. Shareholder’s equity is also called as stockholder’s equity, net worth, net assets, net book value or owner’s equity. Shareholder’s Equity = assets – liabilities What are the sources of shareholder’s equity? The main sources of stockholder’s equity are a. Contributed Capital (arises from sale of…

Balance Sheet Equation

This article is a note that I wrote for myself while taking the course Introduction to Financial Accounting which is available in coursera. The balance sheet is prepared at the close of business on the last day of income statement period. The balance sheet has two main components, assets and liabilities. Assets are registered on the…