What is the Common Stock Account?

The common stock account is a general ledger account in which is recorded the par value of all common stock issued by a corporation. When these shares are sold for an amount in excess of their par value, the excess amount is recorded separately in an additional paid-in capital account. When shares have no par value, the entire amount of the sale price is recorded in the common stock account.

Presentation of the Common Stock Account

The common stock account is classified as an equity account, and so appears near the bottom of a reporting entity’s balance sheet. This presentation appears in the following example of the equity section of a balance sheet.