Bubble Wraps Company receives cash from a stockholder,John Trent,and issues common stock to him.The two accounts involved in this transaction are ________.

Question

Quizplus · Accepted Answer

The accounts involved in the transaction are the Cash account and the Common Stock account. When a company issues common stock, it receives cash from the stockholders, and common stock is credited for the same amount as cash received. Therefore, option B is the correct answer. Option A is incorrect because there is no liability account involved in this transaction. Option C is incorrect because John Payables is not an account relevant to this transaction, and equity is not an account but a category of accounts. Option D is incorrect because John Receivables is not an account relevant to this transaction.

Bubble Wraps Company Receives Cash from a Stockholder,John Trent,and Issues