A company received cash in exchange for issuing stock.This transaction increased assets and:
A)increased expenses.
B)increased revenues.
C)increased liabilities.
D)increased stockholders' equity.

Question

Quizplus · Accepted Answer

The exchange of cash for issued stock is a transaction that increases assets and stockholders' equity, as it increases the amount of resources owned by the company (assets) and the amount of ownership of the company held by shareholders (stockholders' equity). It does not affect expenses or revenues, as these are related to the company's operations and not to the issuance of stock. It does not increase liabilities, as liabilities represent obligations that the company owes to others, and the issuance of stock does not create new liabilities.

A Company Received Cash in Exchange for Issuing Stock