Asked by Paola Davis on Jul 17, 2024
Verified
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.
Equity Account
An account that represents the owner's or shareholders' residual interest in the assets of a company after deducting liabilities.
Common Stock
This represents ownership shares in a corporation, providing voting rights and entitling the holder to a share of the company's success through dividends and capital appreciation.
Stockholder
An individual or entity that owns shares in a corporation, giving them ownership interest.
- Discern the attributes and classification system of different account types (asset, liability, equity, revenue, and expense).
- Understand how transactions impact business equity and financial positioning.
Verified Answer
Learning Objectives
- Discern the attributes and classification system of different account types (asset, liability, equity, revenue, and expense).
- Understand how transactions impact business equity and financial positioning.
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