The total amount of cash and other assets received by a corporation from its stockholders in exchange for common stock is:
A)Always equal to its par value.
B)Always equal to its stated value.
C)Referred to as contributed capital.
D)Referred to as retained earnings.
E)Always below its stated value.

Question

Quizplus · Accepted Answer

The total amount of cash and other assets received by a corporation from its stockholders in exchange for common stock is referred to as contributed capital. It may be equal to, above, or below the stated or par value of the stock depending on the terms of the sale. Therefore, options A, B, D, and E are incorrect.

The Total Amount of Cash and Other Assets Received by a Corporation