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Unformatted text preview: Outsiders claims to assets Include debts payable to creditors • Examples: Accounts payable – liability for goods or services purchased on credit Notes payable – written promise to pay on a certain date (bank loan) Owners’ Equity • Owners’ claim on a business • Assets minus liabilities What’s left after debts are paid • A corporation’s equity is called stockholders’ equity Accounting Equation Example • Compute the missing amount from each situation on the following slide • Remember: Assets = Liabilities + Owners’ Equity Shareholders’ Equity • Paid-in capital • Amounts invested by stockholders • Common stock • Retained Earnings • Amounts earned and kept for use in the company • Increased by Revenues • Decreased by Expenses...
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This note was uploaded on 06/14/2011 for the course ACCOUNTING 23020 taught by Professor Na during the Spring '11 term at Kent State.
- Spring '11
- Financial Accounting