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

Question

Quizplus · Accepted Answer

The investment of cash by John, owner of a sole proprietorship is recorded with a debit to Cash and a credit to John's Capital account. Option D correctly reflects this entry. Option A is incorrect because it has the accounts reversed. Option B is incorrect because "Withdrawals" implies that John is taking money out of the business, not putting money in. Option C has the accounts reversed and uses the incorrect account of "Withdrawals."

Which of the Following Entries Records the Investment of Cash