The common stock account in a company's balance sheet is measured as:
A)The number of common shares outstanding multiplied by the stock's par value per share.
B)The number of common shares outstanding multiplied by the stock's current market value per share.
C)The number of common shares issued multiplied by the stock's par value per share.
D)None of these answer choices is correct.

Question

Quizplus · Accepted Answer

The common stock account in a company's balance sheet is measured as the number of common shares issued multiplied by the stock's par value per share. This represents the total amount of capital that the company has raised from the issuance of common stock. The number of common shares outstanding multiplied by the stock's par value per share represents the total amount of common stock that has been issued and is currently held by shareholders, but not necessarily the total amount of capital that the company has raised from the issuance of common stock. The stock's current market value per share is not relevant to the common stock account on the balance sheet.

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