Which one of the following statements is false?
A) When stock is issued, legal capital is usually the total amount received.
B) Par value has no direct relationship to market value.
C) The accounting for stated value, no-par stock parallels accounting for par-value stock.
D) Capital shareholders have limited liability.

Question

Quizplus · Accepted Answer

Legal capital is typically defined as the par value of the stock issued, not the total amount received. The total amount received can exceed the par value, with the excess recorded as additional paid-in capital.

Which One of the Following Statements Is False