Which of the following describes the impact on the balance sheet when a company uses cash to purchase the stock of another company?
A)Total assets increase.
B)Stockholders' equity increases.
C)Stockholders' equity decreases.
D)Total assets remain the same.

Question

Quizplus · Accepted Answer

When a company uses cash to purchase the stock of another company, it is essentially exchanging one asset (cash) for another (investment in stock), leaving the total assets unchanged.

Which of the Following Describes the Impact on the Balance