The sale of common stock above par was recorded by crediting Common Stock for the total amount.This error would cause:

Question

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When common stock is sold above par, the amount received over par should be credited to an account such as "Additional Paid-In Capital" rather than crediting the entire amount to "Common Stock." However, this error affects the classification within stockholders' equity but does not change the total amount of stockholders' equity. Therefore, it does not cause stockholders' equity or net income to be overstated or understated; it merely misclassifies amounts within equity.

The Sale of Common Stock Above Par Was Recorded by Crediting