Which of the Following Journal Entries Is Correct When a Business

question 18

Multiple Choice

Which of the following journal entries is correct when a business entity issues stock to stockholders in exchange for cash?

• A) Cash
• \( \quad \) Retained Earnings
• B) Cash
• \( \quad \)Contributed Capital
• C) Cash
• \( \quad \)Accounts Payable
• D) Contributed Capital
• \( \quad \) \( \quad \)Cash

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Definitions:

Interest Rates

The proportion of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.