Common Stock

What is Common Stock?

Common stock represents the ownership shares issued by a company to raise capital. Holders of common stock are partial owners of the business and typically have voting rights in shareholder meetings and may receive dividends. The value recorded on the balance sheet reflects the par value of the shares issued, not their market price.

Example: If a company issues 1 million shares at $1 par value, the common stock account will show $1 million.