The Entry to Record the Issuance of Common Stock at a Price

question 146

Multiple Choice

The entry to record the issuance of common stock at a price above its par value includes:

• A)A credit to Cash.
• B)A credit to a liability account for the difference between the price paid by the stockholders and the par value of the stock.
• C)A credit to Additional Paid-in Capital: Common Stock.
• D)A debit to Common Stock.

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Definitions:

Retained Earnings Balance

The amount of net earnings left in a company after dividends have been paid out to shareholders, which is used for reinvestment in the business or to pay down debt.

Audit Committee

A subcommittee of the board of directors responsible for overseeing and ensuring the integrity of financial reports and compliance with legal and regulatory requirements.

Internal Audit Staff

A department or team within a company that conducts independent evaluations of its operations, controls, and compliance with laws and regulations.

Accounting Errors/Irregularities

Unintentional or intentional misstatements or omissions in financial statements resulting from oversight, misinterpretation, or fraud.