Intermediate Accounting 14th Edition

Published by Wiley
ISBN 10: 0470587237
ISBN 13: 978-0-47058-723-2

Chapter 2 - Conceptual Framework for Financial Reporting - Brief Exercises - Page 70: BE2-6j

Answer

(j) Issuance of common stock- Investments by owners

Work Step by Step

Common stocks are ordinary shares issued by a company as an alternative to issuing preference shares. The most common reason for issuing common stock is raising cash and is therefore treated like an investment made by owners or shareholders.
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