Course Outline
Join PRO

What is stock?

Author:
Harold Averkamp, CPA, MBA

Definition of Stock

In business there are at least common meanings for the term stock:

  • Some people use the word stock to mean inventory. In other words, they mean the goods (products, component parts, etc.) that a company has on hand for sale to customers.
  • The word stock is also used when referring to shares of ownership in a corporation.

Examples of Stock

The following are examples of the two meanings of stock:

  • When a company no longer has a certain item in its inventory due to an increase in sales, the customer may be told “The item you requested is currently out of stock, but we expect to have the item in stock within 5 working days.”
  • A recently organized, regular U.S. corporation will be issuing 100,000 new shares of stock for $100 per share. All of the shares being issued are common stock with no par value. Shares of preferred stock are not being issued. When the stock is issued, the corporation will debit Cash and will credit its stockholders’ equity account Common Stock for the amount received.
Join PRO to Track Progress

Advance Your Accounting and Bookkeeping Career


  • Perform better at your job
  • Get hired for a new position
  • Understand your small business
  • Pass your accounting class
Watch the Video
Certificates of Achievement

Earn Our Certificates of Achievement

Certificates of Achievement
  • Debits and Credits
  • Adjusting Entries
  • Financial Statements
  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Working Capital and Liquidity
  • Financial Ratios
  • Bank Reconciliation
  • Payroll Accounting
View PRO Plus Features

Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials

Read all 2,645 reviews

Features

PRO

PRO Plus

Features
Lifetime Access (One-Time Fee)
Explanations
Quizzes
Q&A
Word Scrambles
Crosswords
Bookkeeping Video Training
Financial Statements Video Training
Flashcards
Visual Tutorials
Quick Tests
Quick Tests with Coaching
Cheat Sheets
Business Forms
All PDF Files
Progress Tracking
Earn Badges and Points
Certificate - Debits and Credits
Certificate - Adjusting Entries
Certificate - Financial Statements
Certificate - Balance Sheet
Certificate - Income Statement
Certificate - Cash Flow Statement
Certificate - Working Capital
Certificate - Financial Ratios
Certificate - Bank Reconciliation
Certificate - Payroll Accounting

About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

Read 2,645 Testimonials

Course Outline
Take the Tour Join Pro Upgrade to Pro Plus