book value per share
Financial Dictionary — Accounting Fundamentals
Definition
book value per share Common stockholders' equity divided by common shares outstanding, to indicate stockholders' equity per share
Detailed Explanation
Book value is the net amount at which an asset or company is reported in the accounting records, calculated as historical cost minus accumulated depreciation or liabilities.
Common Uses
- Used in day-to-day bookkeeping and journal entries to record transactions correctly.
- Used when preparing trial balances and reconciling accounts.
- Used when preparing trial balances and reconciling accounts.
Practical Example
- Example: Accountants use **book value per share** when recording transactions and preparing the trial balance.
Why This Term Matters
- Why it matters: Ensures accurate records, supports reliable reporting, and reduces posting and reconciliation errors.