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acc230 week 3 dq1

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Week 3 – DQ 1
The statement of stockholders’ equity details the transactions that affect the balance sheet equity
accounts during an accounting period.” (Axia College, 2007) Common stock shares and
amounts, additional paid in capital and retained earning can be found on the statement of
stockholders’ equity.
Management and investors can use the statement of stockholders’ equity to how the company is
doing. Companies use stock dividends, stock splits or reverse stock splits.
When a company issues stock dividends to existing shareholders the stock dividends reduce the
retained earnings account. The stock represents nothing of value to the stock holder because the
ore proportion of ownership stays the same. The market value per share drops as additional
shares are issued.
Stock splits are used to lower the market price of a firm’s share to make the common stock more
affordable. If a reverse stock split happens occurs, then that means the company is struggling
financially.

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Week 3 - DQ 1 The statement of stockholders' equity details the transactions that affect the balance sheet equity accounts during an accounting period." (Axia College, 2007) Common stock shares and amounts, additional paid in capital and retained earning can be found on the statement of stockholder ...
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