Which of the following entries records the investment of cash by Sam, owner of a sole proprietorship?
A) Debit John, Capital; credit Cash
B) Debit Cash; credit Revenue
C) Debit Sam, Withdrawals; credit Revenue
D) Debit Cash; credit Sam, Capital

Question

Quizplus · Accepted Answer

When an owner invests cash in a sole proprietorship, the cash account (an asset) increases, so it is debited. The owner's equity account increases as well, reflecting the owner's claim on the business assets, so the owner's capital account is credited. Option D correctly reflects this transaction.

Which of the Following Entries Records the Investment of Cash