Ask Question
20 September, 15:02

Investments by stockholders have what effect on the accounting equation? A. Assets increase and liabilities increase. B. Expenses increase and liabilities increase. C. Assets increase and revenues increase. D. Assets increase and stockholders' equity increases.

+5
Answers (1)
  1. 20 September, 15:32
    0
    D. Assets increase and stockholders' equity increases

    Explanation:

    When a stockholoder invests in the company the company has increase its Assets by the amount or fair value of the investment made by the stockholder.

    Consequently, the company should also recognize and increase in the stockholders' equity since it is a stockholder that is adding value ("equity") by investing in the company.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Investments by stockholders have what effect on the accounting equation? A. Assets increase and liabilities increase. B. Expenses increase ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers