Asked Nov 15, 2019

Equity Accounts

1) Common Stock

2) Preferred Stock

3) Retained Earnings

4) Additional paid-in-capital

5) Owners Capital

6) Parnter's Capital

Please explain the differences between the equity accounts and how and when they are used.


Expert Answer

Step 1


Some of the equity accounts:


  • Common stock: Common stock shows the balance of common stock issued by the company and investors holding common stock are the real owners. This account is used when businesses issue common stock. It increases with the issue of common stock.
  • Preferred stock: Preferred stock shows the balance of preferred stock issued by the business, preferred s...

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