What's the differences in balance sheets?
Stockholder’s equity is the portion of the balance sheet that represents the capital from investors in exchange for stock and retained earnings. Stockholders’ equity represents the equity (ownership) stake currently held by a firm’s investors. Stockholder equity is calculated by subtracting the total liabilities from the total assets (Kimmel, Kieso, & Weygandt, 2011).
Stockholders’ equity represents the ownership of investors. This is different than a single-owner business because the single owner owns all the equity. The total assets and liabilities of the balance sheet give the single owner the value of the business which the owner maintains control over.
Kimmel, P. D., Kieso, D. E., & Weygandt, J. J. (2011). Financial accounting: Tools for business decision making. Hoboken, NJ: John Wiley & Sons.
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