Which of the Following Entries Records the Purchase of Common

question 181

Multiple Choice

Which of the following entries records the purchase of common stock by stockholders?

• A)debit Common Stock; credit Accounts Receivable
• B)debit Cash; credit Common Stock
• C)debit Dividends; credit Cash
• D)debit Dividends; credit Common Stock

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Definitions:

Ultimate Consumer

The end user of a product who purchases it for personal, family, or household use, as opposed to purchasing it for resale or for creating another product.

Industrial Buyer

An individual or organization that purchases goods or services for use in the production of other products or for resale.

Consumer Products

Goods that are purchased by individuals for personal use rather than for manufacturing or resale.

Shopping Effort

The amount of time and energy consumers expend to complete a purchase, including research, comparison, and decision-making processes.