Match each transaction with its effect on the accounting equation. Each letter may be used more than once.
-Cash investment by owner
A)Increase assets, increase liabilities
B)Increase liabilities, decrease owner's equity
C)Increase assets, increase owner's equity
D)No effect
E)Decrease assets, decrease liabilities
F)Decrease assets, decrease owner's equity

Question

Quizplus · Accepted Answer

When the owner makes a cash investment into the business, it increases the assets (cash) of the business, which in turn increases the owner's equity in the business. There is no effect on liabilities.

Match Each Transaction with Its Effect on the Accounting Equation