Matthew Martin, the Sole Stockholder of Innovation Consulting, Started the Business

question 61

Multiple Choice

Matthew Martin, the sole stockholder of Innovation Consulting, started the business by investing $40,000 cash in exchange for common stock. Identify the general journal entry below that Innovation Consulting will make to record the transaction.

• A) \(\begin{array}{|l|r|l|}
• \hline \text { Cash } & 40,000 & \\
• \hline \text { Common Stock } & & 40,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|l|r|r|}
• \hline \text { Common Stock } & 40,000 & \\
• \hline \text { Cash } & & 40,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|r|l|}
• \hline \text { Accounts Receivable } & 40,000 & \\
• \hline \text { Cash } & & 40,000 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|r|l|}
• \hline \text { Investments } & 40,000 & \\
• \hline \text { Common Stock } & & 40,000 \\
• \hline
• \end{array}\)
• E) \(\begin{array}{|l|r|l|}
• \hline \text { Cash } & 40,000 & \\
• \hline \text { Note Payable } & & 40,000 \\
• \hline
• \end{array}\)

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Definitions:

First Home

Typically refers to the first house that a person or family purchases and lives in.

Consumer Decision-Making Process

The steps that consumers go through before, during, and after making purchases, including need recognition, information search, evaluation, purchase, and post-purchase behavior.

Problem Recognition

The initial step in the consumer decision-making process, where an individual realizes a difference between their current state and a desired state.

Cognitive Dissonance

The mental discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time.