Common stock has a ________ balance and is a/an ______ to the Corporation.
A)debit; liability
B)credit; liability
C)debit; asset
D)credit; asset
E)credit; equity

Question

Quizplus · Accepted Answer

Common stock has a credit balance and is a liability to the corporation.
Key Takeaway: Common stock is issued in exchange for part of the ownership of the corporation. The account is increased by credits and decreased by debits. It is considered a liability. The stock represents a share of equity that would need to be returned or refunded to a shareholder, almost like an accounts payable for equity. On the other hand, that share of stock represents an asset for the shareholder.

Common Stock Has a ________ Balance and Is A/an ______

Common Stock Has a __ Balance and Is A/an