Owner’s Equity Cycle Paper

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Written by:

Susan A


Date added:

August 1, 2016








No of pages / words:

3 / 687


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2099 times


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While I analyzed the meaning of each area in question I discovered just how much I lacked in understanding of the subject. What I thought would be a simple answer to each of these questions now became more complicated, therefore, I am going to explain what I believe the answer is for each of these question based on what I have read...
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Earned capital is the capital that develops from profitable operations of a company. The reasons I believe paid-in-capital and earned capital should be kept separate is to see exactly how a company is performing because the goal of a company is to make a profit for its investor. This is only one reason to keep paid-in-capital and earned capital separate, another reason would be that earned capital is taxed not paid in capital, if these two items were not separated I would think that it could cause a misrepresentation of revenues earned for stockholders and tax agencies...
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