I have an accounting question.

[LouAvul]

On a balance sheet, where would the following entry be made?

"Capital Stock, $1 par, 10,000 shares issued and outstanding."

Is this an asset or liability and how is it handled?

Thanx.

[Drango]

Yes. And depreciate it.

[1rudeboy]

I hate pop quizzes.

[Not A Snowbird]

Just remember:
Debits on the left, Credits on the Right, Assets on a chair.

[rabscuttle385]

Shouldn’t the stock go under the equity part of the balance sheet? It’s on the same side as the liability part.

Assets = Liabilities + Equity

[Constitution Day]

The Riddler strikes again!

[curiosity]

It’s neither; it’s part of shareholders’ equity.

A = L + E.

[WayneS]

A Bank would consider it both an asset AND a liability.

[Dutchboy88]

Beware of asking important questions when some around here will enjoy pulling your leg.

It belongs in the equity section. If this is for a company you are forming, don’t make it “par value” stock. Just make it no par, with the amount equal to the dollars initially contributed. Much more involved here, so visit with a local CPA.

[AppyPappy]

Technically, nowhere. You need the dollar amount of stock.

[martin_fierro]

I find that dioramas help illustrate the concept.

[GUNGAGALUNGA]

You are correct. It is in shareholder's equity. Well until Obama gets a hold of all US stocks.

[1rudeboy]

LOL—Who was the FR who collected all those vanities into one comment, and repeated them back? I still chuckle about it. Epic internet pwnage.

[arkiehog]

It is an equity item and goes under total liabilities. And remember total liabilities and total equity should equal total assets.

[IYAS9YAS]

Debits on the left, Credits on the Right,

So using a debit card and a credit card cancels everything out, right?

[Ready4Freddy]

LouAvul, the object of your question - "Capital Stock, $1 par, 10,000 shares issued and outstanding." - is actually just a memo that would be in the Equity section to describe the Capital (Common) Stock. The $ amount that would show in the Equity section on the Balance Sheet would be the amount that the company actually received for the stock.

[Constitution Day]

Oh wow. I don’t remember seeing that! Sounds wonderful...I hate I missed it.

[VRWCmember]

It is Equity.
The left side of the balance sheet is Assets, and the right side is Liabilities and Equity.

[Ready4Freddy]

Debits on the left, Credits on the Right, Assets on a chair.

The actual cheer is "Debits on the left, Credits on the Right, LIFO, FIFO, Fight! Fight! Fight!" ;)

[Constitution Day]

I find that dioramas help illustrate the concept.

Turn page papers also have their place...