Issuance of Common Stock for Cash Affects Which Basic Element

question 69

Multiple Choice

Issuance of common stock for cash affects which basic element of financial statements?

• A) Revenues.
• B) Losses.
• C) Liabilities.
• D) Equity.

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Definitions:

Financial Accounting Standards Board (FASB)

The private sector body given the primary responsibility to work out the detailed rules that become generally accepted accounting principles.

Securities and Exchange Commission (SEC)

A U.S. government agency that oversees securities transactions, activities of financial professionals, and the stock market to protect investors.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, culminating in net income or loss.

Liabilities

Financial obligations or debts owed by a company to external parties, which must be settled over time through the transfer of economic benefits.