The Additional Paid-in Capital account normally arises in the accounting records when
A)the number of shares issued exceeds par value.
B)the stated value of capital stock is greater than the par value.
C)the market value of the stock rises above par value.
D)capital stock is issued at an amount greater than par value.

Question

Quizplus · Accepted Answer

Additional Paid-in Capital account arises when capital stock is issued at an amount greater than par value. This account represents the excess amount paid by investors over the par value of the stock. It is a component of stockholders' equity and reflects the amount of contributed capital in excess of the stated value of the stock.

The Additional Paid-In Capital Account Normally Arises in the Accounting