Intermediate Accounting For Dummies

Chapter 16

Letting Owners Know Where They Stand: The Equity Section

In This Chapter

Walking through how corporations raise capital

Gaining a view of the incorporation process

Thinking about the different parts of paid-in capital

Understanding how corporations pay their investors

Calculating earnings per share (EPS)

Discussing convertible stock and warrants

Part IV of this book is all about debt and equity, which are two ways a company can raise funds for business. Read Chapter 14 for a discussion on current debt, such as accounts payable, and Chapter 15 for the scoop on two types of long-term liabilities: notes and bonds. This chapter talks about equity.

Here we cover the nitty-gritty of how stockholders’ interest in a corporation shows up on the balance sheet. This interest reflects in the equity section and in a few different types of accounts. These include additional paid-in capital, ...