If the owner contributed cash as additional capital:
A) one asset increased and another asset decreased.
B) a liability increased and shareholders' equity decreased.
C) an asset increased and shareholders' equity increased.
D) a liability decreased and shareholders' equity increased.

Question

Quizplus · Accepted Answer

When the owner contributes cash as additional capital, the cash account (an asset) increases, and the shareholders' equity account increases because the owner's contribution is considered part of the company's net assets. Therefore, an asset increased and shareholders' equity increased.

If the Owner Contributed Cash as Additional Capital