Which of the following would result if the owner invested cash in the business?
A) Cash would increase and Capital would decrease.
B) Cash would increase and Capital would increase.
C) Cash would decrease and Capital would increase.
D) An investment by the owner is not a business transaction.

Question

Quizplus · Accepted Answer

When the owner invests cash in the business, the cash account increases since cash is coming into the business. However, the capital account also increases since the owner's equity in the business increases as a result of the investment. So, both cash and capital increase.

Which of the Following Would Result If the Owner Invested