Asked Feb 14, 2019

What is the difference between a Stock Account and in equity and Paid-in-Capital account? Are they DR or CR balances? What statement(s) do they appear on?


Expert Answer

Step 1

Step1: Difference between stock account, equity account and paid-in capital account. We have,

Stock account is the ledger account in which credit side showing original capital and addition-in-capital and debit side showing withdrawal and losses.

An equity account is an account which record ownership interests in a company.Shareholders could not withdraw the funds from the equity account because this equity was being used to fund the working capital of the firm. When shareholders receive a profit, this payment is allocated to an equity account.

Paid-in- capital account is the account that showing payment received from the investor in exchange of stock. Paid-in-capital account can involve either common stock or preferred stock. It is also called contributed capital.

Step 2


The normal balance for stock account, equity account and paid-in-capital are credit balance.


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