Quo Corporation issues 100 common shares for $12 per share. This transaction will include a:

Question

Quizplus · Accepted Answer

When a company issues common shares, there is an increase in equity. The account to be credited in this case is Common Shares for the amount of $1,200 (100 shares x $12 per share). Therefore, the correct answer is D. A is incorrect because Common Shares is a credit account. B is incorrect because Contributed Surplus is a separate account that is not affected by the issuance of common shares. C is incorrect because Retained Earnings would only be affected if the company declared a dividend or had a net income for the period.

Quo Corporation Issues 100 Common Shares for $12 Per Share