An owner makes an investment of cash into the business and receives shares of stock.This transaction would include a:
A)debit to Common Stock and a credit to Cash.
B)debit to Cash and a credit to Common Stock.
C)debit to Retained Earnings and a credit to Cash.
D)debit to Common Stock and a credit to Retained Earnings.

Question

Quizplus · Accepted Answer

When an owner makes an investment of cash into the business and receives shares of stock, it is recorded as a debit to Cash (increasing cash balance) and a credit to Common Stock (increasing equity). Therefore, the correct option is B, which shows a debit to Cash and a credit to Common Stock.

An Owner Makes an Investment of Cash into the Business