Which of the Following Occurs When a Stockholder Invests Cash

question 46

Multiple Choice

Which of the following occurs when a stockholder 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:

Infractions

Minor violations or breaches of law which are typically punishable by fines rather than prison time.

Misdemeanors

Less serious criminal offenses that are punishable by fines or imprisonment for less than a year, typically in a county jail.

Act of Commission

A positive action or deed that violates a law or legal obligation, leading to liability.

Act of Omission

Failure to take an action that is legally or morally required, leading to harm or injury.