Selling New Stock Is an Equity Transaction;it Does Not Affect

question 119

True/False

Selling new stock is an equity transaction;it does not affect any asset or liability account and,therefore,does not appear on the statement of cash flows.

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Definitions:

Marginal Benefit

The additional benefit received from consuming one more unit of a good or service.

Marginal Cost

The cost of producing one additional unit of a good or service, which can vary depending on the level of production.

Rational Decision Maker

A theoretical entity in economics and decision theory that systematically and logically evaluates options before making a choice.

Rational Choice

The theory that individuals make decisions based on the maximization of their benefits and the minimization of their costs.