When new shares of stock are sold at a price greater than par value,the excess over par is recorded as:
A) capital surplus.
B) retained earnings.
C) treasury stock.
D) authorized capital.

Question

Quizplus · Accepted Answer

The amount received over and above the par value of shares is called capital surplus. It is a part of the equity section of the balance sheet and represents the amount of money generated by the company's activities that is not related to earnings or drawing down retained earnings. Therefore, the excess over par is recorded as capital surplus.

When New Shares of Stock Are Sold at a Price