Final answer:
The increase in Pech Company's common stock account by $2 million is most likely due to the issuance of new shares of common stock, which is a method for a company to raise capital.
Step-by-step explanation:
If Pech Company's common stock account increased by $2 million and no other information is available, the most likely assumption to explain the increase is that the company issued new shares of common stock. When a company issues stock, it receives cash in exchange for shares of ownership in the company. This transaction increases the company's common stock account by the amount received. For example, if an investor buys a share of stock in a company for a certain price and then sells it later at a higher price, the difference in value is known as a capital gain. However, this gain is related to the investor's perspective and does not directly affect the company's common stock account on its balance sheet.
Issuing new shares of common stock is a way for a company to raise capital. Investors provide cash to the company in hopes of receiving a return on their investment, which can be either through dividends paid by the company or through capital gains if they sell the stock for more than they paid. Therefore, this explanation aligns with how a company's common stock account can increase.