When a Company Issues Common Stock Greater Than Its Par

question 54

Multiple Choice

When a company issues common stock greater than its par value, the excess should be credited to:

• A) retained earnings.
• B) common stock.
• C) paid-in capital in excess of par.
• D) capital.

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Definitions:

Volume Variance

A measure of the difference between the budgeted and actual volume of production, affecting costs or profitability.

Manufacturing Overhead

All manufacturing costs that are not direct labor or direct materials, such as utilities, depreciation, and maintenance of equipment.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process.

Standard Cost System

An accounting method that uses cost estimates to predict the cost of producing or acquiring goods.