A Company Issues $20 Million in New Stock

question 48

Multiple Choice

A company issues $20 million in new stock. It later uses the cash received to pay off promissory notes. How many different accounts and which account names are affected by these two transactions?

• A) 3 accounts involved: contributed capital, cash, and notes payable.
• B) 4 accounts involved: contributed capital, cash, liabilities, and accounts payable.
• C) 3 accounts involved: cash, assets, and accounts payable.
• D) 3 accounts involved: contributed capital, investments, and accounts payable.

---

Definitions:

Social Responsibility

The obligation of individuals and organizations to act in ways that benefit society at large, beyond their own interests or profits.

Obstructionist Strategy

A corporate social responsibility strategy that tries to avoid and resist pressures for social responsibility.

Economic Responsibility

The obligation of an organization to make decisions and take actions that will contribute to the economic well-being of society.

Classical View

A perspective on management and organizational theory that emphasizes efficiency, hierarchical structure, and the importance of planning and formal procedures.