A company credits Additional Paid-in Capital for the portion of the cash proceeds above par value received for the issuance of stock.

Question

Quizplus · Accepted Answer

Additional Paid-in Capital represents the amount that investors paid for shares in excess of the stock's par value. It is credited when issuing stock and reflects funds that are received by the company that are not related to ongoing operations or retained earnings.

A Company Credits Additional Paid-In Capital for the Portion of the Cash