Journal Entries: Business Formation Example Video Lessons

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Problem: Which of the following statements about assets is true? a. The issuance of stock to owners for cash would increase assets and decrease owners’ equity b. Purchasing equipment for cash would increase one type of asset and decrease another type of asset c. Paying a dividend to stockholders would decrease assets and increase stockholders’ equity d. Making a payment on a bank loan would decrease assets and stockholders’ equity

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Problem Details

Which of the following statements about assets is true?

a. The issuance of stock to owners for cash would increase assets and decrease owners’ equity

b. Purchasing equipment for cash would increase one type of asset and decrease another type of asset

c. Paying a dividend to stockholders would decrease assets and increase stockholders’ equity

d. Making a payment on a bank loan would decrease assets and stockholders’ equity

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