Carl and Stefanie Each Invest $15,000 in a Business and Are

question 82

Multiple Choice

Carl and Stefanie each invest $15,000 in a business and are given shares of stock in Thibeau Industries as evidence of their ownership interests.For this transaction, identify the effect on the accounting equation.

• A)Assets increase and liabilities increase.
• B)Assets increase and stockholders' equity increases.
• C)Liabilities increase and stockholders' equity decreases.
• D)Liabilities decrease and assets decrease.

---

Definitions:

Time Value

The principle that having money in the present is more valuable than having the same sum in the future because of its ability to generate earnings.

Capital Investment Analysis

The process of assessing the financial viability of a long-term investment project or proposal, evaluating potential returns and risks.

Money

A medium of exchange that facilitates trade, typically issued by a government as legal tender.

Salvage Value

The anticipated market value of an asset at the conclusion of its serviceable lifespan.