A company's assets and stockholders' equity both increase when the company sells additional shares of stock in exchange for cash.

Stockholders' Equity

The remaining value in a company's assets after liabilities are subtracted, commonly known as owner's equity or shareholder's equity.

Assets

Resources owned or controlled by a business or an individual, which are expected to produce economic value or benefit in the future.

Additional Shares

Shares issued by a company in addition to its existing shares, often to raise extra capital.

Absorbing the principles of the balance sheet's framework and segments, involving assets, the equity of stockholders, and liabilities.
Learning about the procedure of recording transactions and understanding their repercussions on the accounting equation and financial disclosures.

Verified Answer

Michelle Amezquita

Jun 23, 2024

Final Answer :

True

Explanation :

Selling additional shares of stock in exchange for cash results in an increase in the company's cash balance (an asset) and also an increase in the stockholders' equity account.

Learning Objectives

Absorbing the principles of the balance sheet's framework and segments, involving assets, the equity of stockholders, and liabilities.
Learning about the procedure of recording transactions and understanding their repercussions on the accounting equation and financial disclosures.

A company's assets and stockholders' equity both increase when the company sells additional shares of stock in exchange for cash.

Definitions

Learning Objectives

Learning Objectives

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