A business receives \$40,000 in cash from an owner and issues common stock. What are the dual effects on the accounts?

• A. Cash increases by \$40,000; Expenses increase by \$40,000.
• B. Cash decreases by \$40,000; Common Stock increases by \$40,000.
• C. Cash increases by \$40,000; Liabilities increase by \$40,000.
• D. Cash increases by \$40,000; Common Stock increases by \$40,000.

Answer: (D)