Which of the following represents the correct treatment of a credit entry in common stock?

In accounting, a credit entry generally means an increase in equity accounts, which includes common stock. When common stock is issued, the company's ownership structure changes as new shares are created, leading to an increase in the total equity of the company. This increase is recorded as a credit entry.

The credit entry reflects the value of the shares issued, indicating that shareholders have invested more into the company and therefore increases the overall equity. This understanding is fundamental to double-entry accounting where every transaction affects at least two accounts. By crediting common stock, the accounting equation (Assets = Liabilities + Equity) is kept in balance, as increased equity represents more resources contributed by owners to the business.

Consequently, the correct treatment of a credit entry in common stock is to recognize it as an increase in the equity section of the balance sheet.