APIC is also known as?

APIC is also known as?

• A. Share premium
• B. Par value
• C. Retained earnings
• D. Treasury stock

Answer: (A)

APIC represents the amount investors pay above the stock’s par value, and in many standards this is called share premium. It sits in equity as the premium over the nominal value of shares issued. The par value is the nominal amount assigned to each share and is recorded separately as share capital, while the excess over par is recorded as APIC (share premium). For example, issuing 1,000 shares with a par value of $1 at $5 each would increase cash by $5,000, increase share capital by $1,000 (par value), and increase APIC/share premium by $4,000. Retained earnings are accumulated profits, and treasury stock refers to shares the company has repurchased; neither of those relates to APIC.

APIC represents the amount investors pay above the stock’s par value, and in many standards this is called share premium. It sits in equity as the premium over the nominal value of shares issued. The par value is the nominal amount assigned to each share and is recorded separately as share capital, while the excess over par is recorded as APIC (share premium).

For example, issuing 1,000 shares with a par value of $1 at $5 each would increase cash by $5,000, increase share capital by $1,000 (par value), and increase APIC/share premium by $4,000. Retained earnings are accumulated profits, and treasury stock refers to shares the company has repurchased; neither of those relates to APIC.