Asked by Morgan McCord on May 27, 2024
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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.
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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.
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