Friday, October 9, 2020

When a company issues common stock for cash, what is the effect on the accounting equation for the company?

When a company issues common stock for cash, what is the effect on the accounting equation for the company?


A) Assets increase and liabilities increase.

B) Assets increase and stockholders' equity increases.

C) Assets decrease and liabilities decrease.

D) Liabilities decrease and stockholders' equity increases.


Answer: B

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