BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Credit Cash (increase), Debit Common Stock (decrease)
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Debit Cash (increase), Credit Common Stock (decrease)
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Debit Cash (decrease), Credit Common Stock (increase)
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Credit Cash (decrease), Debit Common Stock (increase)
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Detailed explanation-1: -The cash account and the stockholder’s account are both impacted by stock issues. Money you receive from issuing stock increases the equity of the company’s stockholders.
Detailed explanation-2: -Every transaction has two journal entries: a debit and a credit.
Detailed explanation-3: -As we can see from this expanded accounting equation, Assets accounts increase on the debit side and decrease on the credit side. This is also true of Dividends and Expenses accounts. Liabilities increase on the credit side and decrease on the debit side. This is also true of Common Stock and Revenues accounts.
Detailed explanation-4: -4) what are the two accounts affected when a business buys supplies on account? The accounts affected are supplies and accounts payable.
Detailed explanation-5: -The correct option is b. Assets increase and stockholders’ equity increases. When a company issues common stock for cash, it affects the assets and stockholders’ equity accounts. Issue of common stock results in an increase in cash, and cash is an asset.