The common stock account in a company's balance sheet is measured as:
A) The number of common shares outstanding multiplied by the stock's par per share.
B) The number of common shares outstanding multiplied by the stock's current market price per share.
C) The number of common shares issued multiplied by the stock's par per share.
D) None of these answer choices are correct.

Question

Quizplus · Accepted Answer

The common stock account on a company's balance sheet is measured as the number of common shares issued multiplied by the stock's par per share. This is because the par value is the minimum price at which shares can be issued and the number of shares issued represents the total amount of capital raised by the company from issuing common stock. The current market price per share does not affect the common stock account as it represents the value of the company's shares in the stock market, which can fluctuate due to various factors.

The Common Stock Account in a Company's Balance Sheet Is