a-company-issues-10000-shares-of-050-par-value-stock-at-5-per-share-how-does-thi

Question

A company issues 10,000 shares of $$0.50 par value stock at 5 $$per share. How does this transaction differ from a revenue-generating activity?

Accepted Answer

Issuing stock increases equity, while revenue increases net income.

Answer

Issuing stock is recorded as an expense, while revenue is recorded as an asset.

Answer

Issuing stock affects cash flow, while revenue does not.

Answer

Issuing stock decreases liabilities, while revenue decreases equity.

A company issues 10,000 shares of \$0.50 par value stock at \$5 per share. How does this transaction differ from a revenue-generating activity?