Clay and Lora Each Invest $15,000 in Deyer, Inc

question 30

Multiple Choice

Clay and Lora each invest $15,000 in Deyer, Inc. and are given shares of stock as evidence of their ownership interest. What effect does this transaction have on the accounting equation of Deyer?

• A) Assets and liabilities increase
• B) Assets and contributed capital increase
• C) Liabilities increase and retained earnings decrease
• D) Assets and liabilities decrease

---

Definitions:

Trespass To Chattels

Direct, intentional interference with another’s rights to possess his personal property.

Wrongful Interference

An intentional act by one party to disrupt a contractual or business relationship between other parties, causing harm.

Conversion

An intentional tort that involves the unauthorized taking or use of someone else's personal property.

Intentional Tort

A wrongful act done intentionally that causes harm to another person, distinguishable from negligence or accidental harm.