Topics Covered (the WHAT)
This chapter mainly discusses corporations and their existence in the business. It also explains the some of the legal existence of the corporations in the business for instance how the unit of stock is transferable, the presence of the limited as well as the stockholders’ liability. The topic also deals with the paid-in capital and how it is used. The entry and the recording of the dividend are also discussed at length in the topic as well as the role that is played by the corporation in the business field. The debiting and the crediting of the dividend are also explained in the same topic and how they have conducted as well as the conditions that result in the debiting and also the crediting of the dividend. And also the stockholders’ equity is also explained how they occur.
Importance of topics covered (the WHY they’re important)
The importance of the corporate form is summarized, and even the shortcomings that are experienced, for instance, the costs incurred in the business are debited in the firm’s expenses. The source of the paid-in capital comes from the issued as well as the preferred stock. There exist a debit and a credit dividend being paid to when recording a declaration. The corporation lowers the state value of the common stock as proportionate additional shares number is being issued hence the occurrence of the stock split. During the stock split, there is no entry required neither is…
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