What is stockholders’ equity?
Equity is the amount of capital invested into the business by its owners and investors. Equity will also include retained earnings (earnings from prior periods) along with current year earnings. Equity also includes gains or losses that are recorded to other comprehensive income rather than the income statement.
The visual below outlines the most common components of equity:
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What is other comprehensive income (OCI)?
Other comprehensive income (“OCI”) is part of stockholders equity on the balance sheet and is not part of the income statement. OCI represents the current year activity that is used to calculated accumulated other comprehensive income (“AOCI”) at the end of the year. Either gains or losses are recorded to OCI. These gains or losses...
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What does it mean when a balance sheet balances?
For a balance sheet to actually balance, assets has to equal the sum of liabilities and equity. As you can see in the visual below, the balance sheet is balanced because assets = $150 and the sum of liabilities + equity = $150.
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What is a balance sheet?
The balance sheet represents the assets, liabilities, and equity at a point in time (e.g. December 31st, Year 1) and not over a period of time (January 1, Year 1 to December 31st, Year 1). The balance sheet is a key part of a company’s financial statements, along with the income statement and statement of...
What is other comprehensive income (OCI)?
Other comprehensive income (“OCI”) is part of stockholders equity on the balance sheet and is not part of the income statement. OCI represents the current year activity that is used to calculated accumulated other comprehensive income (“AOCI”) at the end of the year. Either gains or losses are recorded to OCI. These gains or losses...
What does it mean when a balance sheet balances?
For a balance sheet to actually balance, assets has to equal the sum of liabilities and equity. As you can see in the visual below, the balance sheet is balanced because assets = $150 and the sum of liabilities + equity = $150.
What is a balance sheet?
The balance sheet represents the assets, liabilities, and equity at a point in time (e.g. December 31st, Year 1) and not over a period of time (January 1, Year 1 to December 31st, Year 1). The balance sheet is a key part of a company’s financial statements, along with the income statement and statement of...
