The Common Stock account on a company's balance sheet is measured as:

Question

Quizplus · Accepted Answer

The Common Stock account represents the capital contributed by shareholders in exchange for ownership of a corporation, and it is measured as the number of common shares issued multiplied by the par value per share. The par value is the nominal, or minimum, value assigned to each share by the company's articles of incorporation and has no relation to the market price of the stock. Therefore, options A and B, which use the number of common shares outstanding and the stock's current market value, respectively, are incorrect. Option D is also incorrect because it implies that the common shares are sold above or below their par value, which is not allowed in most jurisdictions.

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