The journal entry to record an investment by the owner would most commonly include:
A) a debit to Cash and a credit to Fees Earned.
B) a debit to Capital and a credit to Cash.
C) a debit to Fees Earned and a credit to Capital.
D) a debit to Cash and a credit to Capital.

Question

Quizplus · Accepted Answer

When an owner invests in their business, the company receives cash (or other assets), which increases the Cash account (an asset account) through a debit. Simultaneously, the owner's equity in the company increases, which is recorded by crediting the Capital account. This reflects the owner's increased investment in the business.

The Journal Entry to Record an Investment by the Owner