Asked by Lauren Byrd-Moreno on May 09, 2024
Verified
When no-par stock is issued, Common Stock is credited for the selling price of the stock issued.
No-Par Stock
Refers to stocks issued without a specified face value but instead are sold at a price determined by the issuing company.
Credited
Recorded or acknowledged as having received something, often used in financial contexts to indicate an addition to certain accounts.
Selling Price
The price at which a product or service is sold to customers.
- Understand the approach to accounting for par and no-par value shares, incorporating the concept of stated value.
Verified Answer
MA
Marcela AlvaradoMay 10, 2024
Final Answer :
True
Explanation :
When no-par stock is issued, the Common Stock account is credited for the entire amount of the selling price, as there is no par value to allocate part of the proceeds to a separate paid-in capital account.
Learning Objectives
- Understand the approach to accounting for par and no-par value shares, incorporating the concept of stated value.