Question

multiple choice question

transactions between a company and its stockholders affect the companys ________ accounts on

• balance sheet
• asset
• income statement
• liability

Explanation:

Identify transaction nature

Transactions with stockholders involve issuing stock, repurchasing treasury stock, or paying dividends.

Determine financial statement impact

These transactions directly change equity and cash, which are balance sheet accounts.

Evaluate options

They do not affect income statement accounts (revenues/expenses) because transactions with owners are not operating activities.

Answer:

• balance sheet (Correct answer)
• asset
• income statement
• liability