Multiple Choice
Two friends decide to launch a new business by investing $25,000 each in Hot Spot Tanning. They are given shares of stock as evidence of their ownership interest. What effect does this transaction have on the accounting equation?
A) Assets and liabilities increase.
B) Assets and contributed capital increase.
C) Liabilities increase and retained earnings decrease.
D) Assets and liabilities decrease.
Correct Answer:
Verified
Correct Answer:
Verified
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