When verifying if capital stock is accurately recorded,
A) the ending balance in the account does not need to verified.
B) the number of shares outstanding at the balance sheet date is verified by examining the corporate minutes.
C) the recorded par value can be determined by multiplying the number of shares by the market price of the stock.
D) a confirmation from the transfer agent is the simplest way to verify the number of shares outstanding at the balance sheet date.

Question

Quizplus · Accepted Answer

A confirmation from the transfer agent is the simplest and most reliable way to verify the number of shares outstanding at the balance sheet date. This confirms the number of shares issued and outstanding, which is important in determining the accuracy of the capital stock balance. The other options, such as examining the corporate minutes or multiplying the number of shares by the market price, may provide additional information but are not as reliable as a confirmation from the transfer agent. Additionally, the ending balance in the account should be verified to ensure accuracy.

When Verifying If Capital Stock Is Accurately Recorded