PREMIUM ON CAPITAL STOCK Definition

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PREMIUM ON CAPITAL STOCK is excess received over the par value of stock issued. The premium account is shown under the paid-in capital section of stockholders equity because it resulted from the issuance of stock. It is not an income statement account since the company earns profit by selling goods and services to outsiders, not by issuing shares of stock to owners.

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TRADE ACCEPTANCE is a draft drawn by the seller of goods upon the buyer who agrees to pay usually by signing "accepted" on the draft along with the buyers signature.

DEBT CONSOLIDATION is initiating one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

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