Multiple Choice Question A consutting firm signs a contract with a new employee. The employee is expected to begin work in one month from the signing of the contract. This event O causes stockholders' equity to decrease O causes assets to increase O causes liabilities to decrease

The event of signing a contract with a new employee who is expected to begin work in one month does **not** immediately impact the firm's assets, liabilities, or stockholders' equity. Here's why: 1. **Assets**: There is no immediate acquisition of assets. The firm hasn't received any economic benefits yet. 2. **Liabilities**: Signing the contract creates a future obligation to pay the employee, but under most accounting standards, this is not recognized as a liability until the obligation is certain and measurable (i.e., when the employee begins work and starts earning wages). 3. **Stockholders' Equity**: There is no immediate effect on equity. Equity might decrease in the future when expenses related to the employee (like salary) are recognized, but not at the time of signing the contract. **Therefore, none of the provided options accurately describe the immediate impact of signing the contract.** **Answer:** None of the listed options are correct; signing the contract does not immediately affect equity, assets, or liabilities.