Answer:
Explanation:
The journal entry to record the given transaction is shown below:
Cash A/c Dr XXXXX
To Common stock A/c XXXXX
(Being the issuance of the common stock is recorded)
The accounting equation is
Total Assets = Total liabilities + Stockholder equity
Cash Increased = No effect + Increased
Therefore, the cash account and the common stock is increased.
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Answer:
C. Leniency Error
Explanation:
It is the tendency to give favorable ratings that are generally more lenient than true performance. In this case the manager does this to avoid conflict.
