The sale of common shares should be recorded as a
A) debit to Retained Earnings and a credit to Cash.
B) debit to Cash and a credit to Retained Earnings.
C) debit to Cash and a credit to Common Shares.
D) debit to Common Shares and a credit to Cash.

Question

Quizplus · Accepted Answer

When common shares are sold, cash is received, so Cash is debited, and Common Shares, representing the equity issued, is credited.

The Sale of Common Shares Should Be Recorded as a