If a company receives $12,000 from Its sole stockholder to establish a corporation, the effect on the accounting equation would be: A. Assets decrease $12,000 and equity decreases $12,000. B. Assets increase $12,000 and liabilities decrease $12,000. C Assets increase $12,000 and liabilities increase $12,000. D. Assets increase $12,000 and equity increases $12,000. 4. Accrual basis accounting ruled as following: Recognize revenue when it: recognize expense when It _______, A. Received: paid B. Received: incurred C. Earned: incurred D. Earned: paid