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In accounting when the term paid in capital account is used what does this mean?
Wiki User
∙ 16y ago
A dictionary definition is given by
"Paid-in capital represents the amounts paid to the corporation in exchange for shares of the company's preferred and common stock."[1 (reference given below)] [2]
But what is the context? I am learning this myself and what i have encountered is a balance sheet entry. One should remember that generally balance sheet entries represent ACCOUNTS (i.e. they are accumulative). Thus for example if the year 2006 entry for paid-in capital is $1000 and the year 2005 entry is $900 then that means that $100 was paid in 2006 by someone for stock. (Actual story is a bit more complicated: The $100 represents part of the amount paid-in for stock, namely the part in excess of par value. )
REFERENCES
[1] http://www.britannica.com/eb/topic-438420/paid-in-capital
[2] http://en.wikipedia.org/wiki/Paid_in_capital
Wiki User
∙ 16y ago
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What is the normal balance of a additional paid-in capital account?
Additional Paid-in Capital is a normal credit balance account.
What type of account is paid-in capital in excess of par?
additional paid in capital
Where to look for paid up capital in financial statement?
Paid up capital will be kept in debit side in accounting statement
What type of account is paid in capital in excess of par?
Paid in capital in excess of par is called "Share premium account"
What is the different kind of capital in accounting?
1 - Authorized capital 2 - Subscribed capital 3 - Paid up capital
What is the normal balance of a additional paid-in capital account?
Additional Paid-in Capital is a normal credit balance account.
What type of account is paid-in capital in excess of par?
additional paid in capital
Where to look for paid up capital in financial statement?
Paid up capital will be kept in debit side in accounting statement
What type of account is paid in capital in excess of par?
Paid in capital in excess of par is called "Share premium account"
What is the different kind of capital in accounting?
1 - Authorized capital 2 - Subscribed capital 3 - Paid up capital
In accounting which account cannot have a debit balance so if you need to decrease it by more than the credit balance of the account you would need to debit retained earnings?
I figured it out, Additional Paid-In Capital - Treasury Stock
What is water capital?
Watered capital is the value of the eroded capital on account of a company continuously incurring losses. The accumulated losses and other intangible assets are viewed as a percentage of the paid-up capital and watered capital is the residual part of the paid-up capital after accounting the amount of losses
What are the accounting journal entries to record the exchange of debt for common stock?
Debit the liability (debt) account and credit Common Stock (for the par value of the shares) and Additional Paid in Capital (for the balance).
What does paid in capital account represent?
par value of common and preferred stock+additional paid in capital(amount in excess of par)
What are the accounting journal entries to record paid on account?
Debit accounts payableCredit cash / bank
Is paid in capital a debit or credit account?
Paid in capital is liability for business and like all liabilities it also has credit balance as normal balance.
What is the journal entry to increase paid up capital?
debit cash /bankcredit capital account
