WHEN OPENING A COMPANY: PROFIT AND LOSS STATEMENT, SHOULD THE INICIAL STOCK INVESTMENT BE CONSIDERED INCOME?

This is an accounting question:
Are batch investments, primary or re sell of stocks, purebred in the
profit as well as detriment matter as income?

{ 2 comments… read them below or add one }

myyahooanswersaccount1184 May 2, 2010 at 11:45 pm

It’s been a while since I’ve taken an accounting course, but I believe the cash from the investment is considered a debit, while the debt from it is considered a credit. This balances the profit out to 0, keeping the debt consistent with the debits when you spend the cash on assets.

N C May 3, 2010 at 12:12 am

No. The transaction would be recorded something like this.

Debit cash or other Asset account
Credit Investment or Equity

Note that the specific accounts depend on the investment type and what the investment is used for. This applies equally to bringing in money or fixed assets.

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