What would be the effect on the accounts if the owner invested cash into the business?
A) An asset would be debited and Capital credited.
B) Withdrawals would be debited and an asset credited.
C) An asset would be debited and a revenue credited.
D) A Revenue would be debited and Capital credited.

Question

Quizplus · Accepted Answer

When the owner invests cash into the business, the business's assets increase because it has more cash. This increase in assets is recorded by debiting an asset account. Simultaneously, the owner's equity in the business increases, which is recorded by crediting the Capital account. This reflects the basic accounting principle that for every transaction, there must be a debit and a credit, maintaining the balance of the accounting equation: Assets = Liabilities + Owner's Equity.

What Would Be the Effect on the Accounts If the Owner