Question

The receipt of the proceeds from a bank loan would increase both cash on the asset side of the balance sheet and __________ on the liabilities/owners’ equity side of balance sheet.

The receipt of the proceeds from the sale of a company’s stock to the public would result in an increase in both cash on the asset side of the balance sheet and __________ on the liabilities/owners’ equity side of the balance sheet.

These are short answer, no answer choices

      

Answer 1

The receipt of the proceeds from a bank loan would increase both cash on the asset side of the balance sheet and Long term liabilities/Long term debt on the liabilities/owners’ equity side of balance sheet.

as Loan is a liability and journal entry for receipt of loan will involve debit to cash and credit to bank loan

The receipt of the proceeds from the sale of a company’s stock to the public would result in an increase in both cash on the asset side of the balance sheet and Stockholders' Equity/Common Stock on the liabilities/owners’ equity side of the balance sheet.

As the entry would involve debit to cash and credit to common stock/Paid in surplus account