Which of the Following Occurs When a Shareholder Invests Cash

question 145

Multiple Choice

Which of the following occurs when a shareholder invests cash in a corporation in exchange for stock?

• A)Both liabilities and stockholders' equity are increased.
• B)Both assets and stockholders' equity are increased.
• C)One asset is increased and another asset is decreased.
• D)Both assets and liabilities are increased.

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Definitions:

Profit Centers

Segments or units within a business that are responsible for generating profits and are evaluated based on their profitability.

Divisional Profit

The earnings attributable to a specific division of a corporation, often analyzed to assess the division's financial performance.

Corporate Executives

individuals who hold senior management positions within a company, responsible for making strategic decisions and overseeing operations.

Division Revenues

The income generated from the operations of a specific division within a larger corporation or organization.