A company received $33,000 cash and issued common stock in exchange. How does this transaction affect the accounting equation?
A)Add $33,000 to Cash and add $33,000 to Retained Earnings.
B)Add $33,000 to Cash and add $33,000 to Revenue.
C)Add $33,000 to Dividends and subtract $33,000 from Retained Earnings.
D)Add $33,000 to Cash and add $33,000 to Common Stock.

Question

Quizplus · Accepted Answer

The transaction increases the company's cash (asset) by $33,000 and increases common stock (equity) by $33,000, maintaining the balance in the accounting equation.

A Company Received $33,000 Cash and Issued Common Stock in Exchange