Is common stock a component of paid-in capital?

Common stock is a component of paid-in capital, which is the total amount received from investors for stock. On the balance sheet, the par value of outstanding shares is recorded to common stock, and the excess (that is, the amount the market price adds to par value) is recorded to additional paid-in capital.

What does the sum of common stock and additional paid-in capital represent?

The sum of common stock and additional paid-in capital represents the paid-in capital. Common stock is a component of paid-in capital, which is the total amount received from investors for stock. Paid-in capital appears as a credit (that is, an increase) to the paid-in capital section of the balance sheet, and as a debit, or increase, to cash.

What is the difference between paid in capital and additional paid-in capital?

A: Paid-in capital includes the entire amount paid to a company by an investor in exchange for stock. Additional paid-in capital includes only the portion of paid-in capital that is in excess of the stock’s par value. Q: What other term can be used to describe additional paid-in capital on a company’s financial statement?