Definition of Capital Stock
Capital stock refers to the shares of ownership that have been issued by a corporation. The amount received by the corporation when its shares of capital stock were issued is reported as paid-in capital within the stockholders’ equity section of the balance sheet.
Examples of Capital Stock
Capital stock is the combination of a corporation’s common stock and preferred stock.
Common stock is issued by every U.S. corporation. A small percentage of corporations also issue preferred stock. The stockholders’ equity section of the balance sheet will list the types and amounts of the capital stock.
