Common stock and additional paid-in capital are both reported on the balance sheet as components of shareholders' equity.

Common Stock

Represents ownership shares in a corporation, giving shareholders the right to vote on corporate matters and to receive dividends.

Additional Paid-in Capital

The amount of money that shareholders have invested in a company in excess of the nominal or par value of the shares.

Shareholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, indicative of the company’s net worth.

Mastering the fundamentals of the balance sheet's composition and design, which includes shareholders' equity, liabilities, and assets.
Acquaintance with the function and application of various entities in financial ledgers, including assets (both liquid and fixed), liabilities, and features of stockholders’ equity, namely common stock and additional paid-in capital.

Verified Answer

Final Answer :

True

Explanation :

This is correct. Both common stock and additional paid-in capital are components of shareholders' equity on the balance sheet.

Learning Objectives

Mastering the fundamentals of the balance sheet's composition and design, which includes shareholders' equity, liabilities, and assets.
Acquaintance with the function and application of various entities in financial ledgers, including assets (both liquid and fixed), liabilities, and features of stockholders’ equity, namely common stock and additional paid-in capital.