ABC Company deposited $20,000 in a bank account in return for issuing shares in the corporation.This transaction would affect which two financial statement elements?
A) Assets and stockholders' equity
B) Assets and liabilities
C) Liabilities and stockholders' equity
D) None of these

Question

Quizplus · Accepted Answer

When ABC Company deposited $20,000 in a bank account in return for issuing shares in the corporation, it resulted in an increase in assets (bank account) and an increase in stockholders' equity (shares issued). Therefore, the correct options are A (Assets and stockholders' equity). The transaction does not affect any liabilities, so options B and C are incorrect. Option D is also incorrect as the transaction affects two financial statement elements.

ABC Company Deposited $20,000 in a Bank Account in Return