Lesson 7.6 Account Title: CAPITAL for Business Organization

Question 1

CAPITAL for Sole Proprietorship

• Amount the owner invested in the company (through cash or other assets) plus earnings of the company not withdrawn by the owner.

Answer 1

SERRANO, Capital

Question 2

CAPITAL for Sole Proprietorship

• Amount that the owner of the sole proprietorship has withdrawn for personal use during the accounting year. At the end of the year, the amount in this account will be transferred into SERRANO, Capital.

Answer 2

SERRANO, Drawing

Question 3

CAPITAL for Partnership

• Amount that the owner of the sole proprietorship has withdrawn for personal use during the accounting year. At the end of the year, the amount in this account will be transferred into SERRANO and YU VEGA Capital.

Answer 3

SERRANO, Drawing

YU VEGA, Drawing

Question 4

CAPITAL for Partnership

• Amount the owner invested in the company (through cash or other assets) plus earnings of the company not withdrawn by the owner.

Answer 4

SERRANO, Capital

YU VEGA, Capital

Question 5

The names of the owners are no longer indicated in the account but in the certificates of the stocks they purchased.

Answer 5

Capital for Corporation

Question 6

CAPITAL for Corporation

• is the number of common and preferred shares that a company is authorized to issue, according to its corporate charter. The amount received by the corporation when it issued shares of its capital stock is reported in the shareholder’s equity section of the balance sheet.

Answer 6

Capital Stock

Question 7

CAPITAL for Corporation

• is the number of shares a company holds in its treasury. It is essentially capital stock that has been bought back or was never issued to the public

Answer 7

Treasury Stock

Question 8

CAPITAL for Corporation

• is the value of share capital above its stated par value and is an accounting item under Shareholders’ Equity on the balance sheet. It can be created whenever a company issues new shares and can be reduced when a company repurchases its shares.

Answer 8

(APIC)

Additional Paid In Capital

Question 9

CAPITAL for Corporation

• The distribution of reward from a portion of the company’s earnings and is paid to a class of its shareholders. These are decided and managed by the company’s board of directors, though they must be approved by the shareholders through their voting rights.

Answer 9

Dividends

Question 10

Last account title for Corporation

Answer 10

Retained Earnings