What is the capital account?
Definition of Capital Account
In accounting and bookkeeping, a capital account is a general ledger account that is part of the balance sheet classification:
- Owner’s equity (in a sole proprietorship)
- Stockholders’ equity (in a corporation)
A corporation will likely have the following capital accounts:
- Paid-in capital accounts such as Common Stock, Preferred Stock, Paid-in Capital over Par, which is used to record the amounts received by the corporation when shares of its capital stock were originally issued to investors.
- The account Retained Earnings which consists of the number of the corporation’s earnings since the corporation was formed minus the dividends distributed to the stockholders since the corporation was formed.
- The account Treasury Stock, which has a debit balance representing the amount paid by the corporation to repurchase its shares of stock which it did not retire.
Other Information on Capital Accounts
The total of the balances in all of the capital accounts must be equal to the reported total of the company’s assets minus its liabilities. Because of the historical cost principle and other accounting principles, the total amount reported in the capital accounts will not indicate a company’s market value.
Here you are going to learn about the steps to create the Capital Account in Fresa Gold.
First Login with Fresa Gold, Navigate to Accounts–> Accounts Settings (Fig.1).
2. Select the COA Master (Chart of Account) (Fig.2)
3. Click Create button to create capital Account in Chart of Accounts List (Fig.3).
4. Enter the mandatory fields, like COA Code, Name, Category, Group, Currency, etc, once entered click Save button (Fig.4)
5. Now the Capital Account is created in COA Master (Fig.5)
I hope you got an idea about to create the Capital Account in Chart of Account.
For further clarification, send your queries to Support@fresatechnologies.com because our motto is to help customers.
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