When cash is received from a stockholder in exchange for common stock,the transaction is recorded by debiting Cash and crediting a(n):
A)Asset account.
B)Equity account.
C)Revenue account.
D)Expense account.
E)Liability account.

Question

Quizplus · Accepted Answer

When cash is received from a stockholder in exchange for common stock, the transaction is recorded as a credit to the equity account, specifically the common stock account. This reflects the issuance of additional ownership interest in the company to the stockholder who provided the cash.

When Cash Is Received from a Stockholder in Exchange for Common