Proceeds of company shares of sold stock is recorded in___________?
Correct answer: B. Common stock account
- A. Preferred stock account
- B. Common stock account
- C. Due stock account
- D. Preceded stock account
Explanation
When a company issues common shares, the proceeds are credited to the common stock account, with any amount above par value usually recorded as additional paid-in capital. The other listed accounts are not standard equity accounts for this transaction.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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