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Which of the following changes describes the sale for cash of $1,000 of 100 shares of stock?

<p>A)Assets and owners' equity increase by $1,000 B) Assets and owners' equity decrease by $1,000 C) Assets and liabilities increase by $1,000 D) Assets and liabilities decrease by $1,000 E) No changes in total assets, liabilities, or owners' equity</p>

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Question added by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia
Date Posted: 2014/12/19
mohamed Hakim CMA CPA Candidate
by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

Hi all

Why choose E 

Entry is 

Debit /    cash 

Credit/    common shares 

There is increase in assets and owner equity

Answer A

 

Asif Pyarali (CMA finalist)
by Asif Pyarali (CMA finalist) , Manager Finance and Export , Amlani Enterprises

A is the right answer, providing stock in cash increase the assets and owner's equity.

Nirav Pomal
by Nirav Pomal , FINANCIAL CONTROLLER , SENEGINDIA SA

b ) Assets and owner's equity decrease by $1000

Shahbaz Hayder
by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

E is the right answer.

 

Assumed100 shares of stock relate to short term investment held for trading.

 

So, by selling investment (current asset) and bringing another current asset (Cash) would not affect total assets.

Ahmed kandil
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

correct answer is E 

georgei assi
by georgei assi , مدير حسابات , المجموعة السورية

The correct answer answer E

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

E) No changes in total assets, liabilities, or owners' equity

Ahmed Abdi Mahad
by Ahmed Abdi Mahad , Director of Internal Auditing Directorate , Jigjiga University

Cash ...................... $1,000

    Common stock ................ $1,000

 

So, choice A is the answer for this question

Ahmer Zamir
by Ahmer Zamir , Consultant , Saleem Associates & Co

The Correct option is A) Assets and Owners' Equity increase by $1000

Deleted user
by Deleted user

Answer C is correct - Assets and liabilities increase by $1000

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