What is Creditors Equity
What is Creditor's Equity. Also write down its formula.
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Creditor's Equity: In Accounting, Creditor's equity displays the relationship among total amount of debt and total amount of assets. Creditors’ equity can be computed by dividing total amount of debt with total amount of assets. This is as well termed as creditor's equity ratio.
Creditor's equity ratio = Total Debt/Total Assets
To transfer amounts from retained earnings to contributed capital through stock dividends. The effect is to decrease retained earning and increase the stock account. Stock dividends also permanently retain the earnings in the corporation by moving it out of the retain
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