Question

multiple choice question
j. jackson invested $1,000 in his business in exchange for common stock. show how to use t - accounts to record this transaction by selecting the correct answer below.

• debit cash; credit common stock
• credit cash; debit common stock
• debit cash; credit revenue.
• debit investments; credit cash.

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Explanation:

Step1: Identify asset change

Cash (asset) increases by $1,000. Per double-entry rules, assets are debited when increased: $\text{Debit Cash } \$1,000$

Step2: Identify equity change

Common stock (equity) increases by $1,000. Per double-entry rules, equity is credited when increased: $\text{Credit Common Stock } \$1,000$

Step3: Match to option

This entry matches the first option.

Answer:

Debit Cash; credit Common stock