How to Account For Ordinary, Preference, and Treasury shares

Abstract

Shares are proof of ownership or participation in a company. If investors buy shares, it means they are buying company prospects. If the value of a company's prospects is good, then the stock will increase. Shares can be divided into 3 (three) namely common stock, preferred stock and treasury stock. Common stock has characteristics that distinguish it from other investments, for example, it does not promise a fixed income and usually has no maturity. Preferred stock is stock where the owner has privileged rights at the time of distribution of dividends or at the time of distribution of assets if the company is liquidated. In addition, there are also so-called treasury shares, treasury stocks are ordinary shares issued to investors and then repurchased by the company for the company itself.