As soon as a corporation is authorized to issue shares, an accounting journal entry should be made recording the total value of the shares authorized.

Question

Quizplus · Accepted Answer

The authorization of shares does not result in any cash being received by the corporation or any change in the shareholder's equity. An accounting journal entry is not required until the shares are actually issued and there is a transaction involving cash or another asset.

As Soon as a Corporation Is Authorized to Issue Shares