If Common Stock Is Issued for an Amount Greater Than

question 65

Multiple Choice

If common stock is issued for an amount greater than par value, the excess should be credited to

• A) Retained Earnings.
• B) Cash.
• C) Legal Capital.
• D) Paid-in Capital in Excess of Par Value.

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Definitions:

Investing Activities

Investing activities are financial transactions involving the purchase and sale of long-term assets and other business investments.

Cash Outflow

A decrease in cash is called a cash outflow or a use of cash. When listing a total for a major section of the statement of cash flows, if cash has decreased, the figure is often described as “cash used” in operating activities (or in investing activities or financing activities).

Equity Securities

Financial assets representing ownership interest in an entity, such as stocks.

Statement of Cash Flows

A report detailing how alterations in balance sheet items and revenues influence the cash and cash equivalents, segmented into operations, investments, and funding activities.