When a stockholder contributes land to a corporation in exchange for stock,________.
A) liabilities and stockholders' equity are increased
B) assets and stockholders' equity are increased
C) one asset is increased and another asset is decreased
D) assets and liabilities are increased

Question

Quizplus · Accepted Answer

When a stockholder contributes land to a corporation in exchange for stock, both assets (land) and stockholders' equity are increased. There is no effect on liabilities since it is an exchange transaction and does not involve borrowing or repaying debts.

When a Stockholder Contributes Land to a Corporation in Exchange