Question

When a company converts its equity shares into capital stock then the account to be credited is equity share stock account

Answer 1

Answer:

The account which needs to be debited when an organization converts equity shares into capital stock is the equity share stock account.

Explanation:

Shares are fractional ownership holdings in a corporation, as indicated. For some enterprises, shares are a type of investment instrument that allows for the economic equality of any declared residual profits in the form of dividends. A stock without any paying dividends does not transfer its profit to its shareholders.

As a long-term benefit in the form of organizations trying to get money, equity shares are described. Each equity share is a profit share interest in the company. The public is given the option to invest in equity shares, commonly referred to as typical stock or common shares.

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