1
Page 1
Share Capital
A company raises finance by issuing shares. Shareholders own the company, while directors manage it on their behalf.
shares -> ownership
Remember
Separate ownership from management.
Accounting Student Book 2 chapters
Study
3 pages
Company Accounts
Reference: Pearson Edexcel International AS / A Level Accounting Student Book 2. Company accounts introduce share capital, reserves, dividends and a clearer separation between ownership and control.
What you'll learn
Main skills from this lesson
Identify ordinary share capital, reserves and dividends
Prepare company statement extracts
Explain how company ownership differs from sole traders and partnerships
2
Page 2
Reserves
Reserves are part of equity. They may come from retained profits or other gains and appear in the equity section of company accounts.
capital + reserves
Remember
Reserves are not the same as cash.
3
Page 3
Dividends
Dividends are distributions of profit to shareholders. They reduce retained earnings when recorded.
profit -> dividend
Remember
Check whether the dividend is proposed or paid.
Great work
Continue with quizzes, flashcards, or games when you are ready.