Ordinary shares

In this lesson

1. 0:00 Ordinary shares explained
2. 0:48 Share pricing terminology
3. 1:19 Recording share issues at nominal value
4. 2:58 Recording share issues at premium
5. 3:41 Worked example: Camden share issue
6. 5:14 Key share capital terminology

About this lesson

You'll explore what ordinary shares entitle holders to (dividends and voting rights), understand the three different share prices (nominal, issue, and market), and master the journal entries needed when shares are issued at nominal value or at a premium. Through a worked example, you'll see how to split the cash received between share capital and share premium, and you'll pick up key terminology like authorised share capital and issued share capital that you'll need to recognise in exams. Ordinary shares are fundamental to how limited companies raise capital, and understanding their accounting treatment is essential for papers like Financial Reporting, Financial Accounting, and Strategic Business Reporting. This lesson breaks down a concept that can feel abstract into clear, practical steps: identify the nominal value, calculate total cash received, find the premium, then record the correct journal entry. By the end, you'll feel confident tackling share issue questions in your assessments and know exactly where each element belongs in the financial statements.

Duration: 6m