If a company issues common stock for $40,000 and uses $30,000 of the cash to purchase a truck,
A)assets will be increased by $10,000.
B)equity will be reduced by $40,000.
C)assets will be increased by $40,000.
D)assets will be unchanged.

Question

Quizplus · Accepted Answer

The issuance of common stock increases cash (an asset) by $40,000. Purchasing a truck decreases cash by $30,000 but increases another asset (the truck) by $30,000. Overall, assets increase by $10,000.

If a Company Issues Common Stock for $40,000 and Uses