The Additional Paid-In Capital Account Normally Arises in the Accounting

question 28

Multiple Choice

The Additional Paid-in Capital account normally arises in the accounting records when

• A)the number of shares issued exceeds par value.
• B)the stated value of capital stock is greater than the par value.
• C)the market value of the stock rises above par value.
• D)capital stock is issued at an amount greater than par value.

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Definitions:

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of a good changes as more of that good is produced.

Average Variable Cost Curve

A graphical representation showing how the average variable cost of production changes as the quantity of output changes.

Marginal Cost

The augmentation in cumulative cost resulting from the manufacture of an additional unit.

Average Total Cost

The total cost of production divided by the quantity produced, representing the average cost per unit of output.