Paid-in capital is
A) a debt that must be paid within the year.
B) the process of distributing the cost of an asset over its useful life.
C) the amount paid for an existing business above the value of its other assets.
D) a debt that is not due for at least one year.
E) additional money, above proceeds from a stock sale, paid directly to a firm by its owners.

Question

Quizplus · Accepted Answer

Paid-in capital refers to the additional money that is paid directly to a firm by its owners, over and above the proceeds from a stock sale. This can come in the form of cash, property or services, and represents the owners' investment in the business. It is recorded in the equity section of the balance sheet and is not a debt that the firm owes to anyone.

Paid-In Capital Is