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A Capital Surplus Is Obtained When the Par Value of a Stock

question 13

True/False

A capital surplus is obtained when the par value of a stock is greater than the retained earnings.


Definitions:

Void Contract

A contract that lacks legal validity, making it unenforceable and as if it never existed from the onset.

Voidable Contract

A valid agreement that may be legally voided at the option of one of the parties due to certain conditions such as fraud or duress.

Contract in Place

An existing agreement that has been formally established and is legally binding.

Liable

Legally responsible or obligated.

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