company a received cash and issued stock to a new stockholder. in recording this transaction: a. cash would…
company a received cash and issued stock to a new stockholder. in recording this transaction: a. cash would be credited. b. common stock would be debited. c. cash would be debited. d. retained earnings would be credited.
Answer
Brief Explanations:
When a company receives cash, cash (an asset) increases. In accounting, an increase in an asset is recorded as a debit. Issuing stock increases the common - stock account (an equity account), which is credited. So, cash should be debited in this transaction.
Answer:
C. Cash would be debited.