Clifford Moore is starting his computer programming business and has deposited in initial investment of $15,000 into the business cash account. Identify how the accounting equation will be affected.
A) Increase Assets (Cash) and increase Liabilities (Accounts Payable)
B) Increase Assets (Cash) and increase Owner's Equity (Clifford Moore, Capital)
C) Increase Assets (Accounts Receivable) and decrease Liabilities (Accounts Payable)
D) Increase Assets (Cash) and increase Assets (Accounts Receivable)

Question

Quizplus · Accepted Answer

When Clifford Moore deposits the initial investment of $15,000 into the business cash account, it increases the assets (cash) of the business. At the same time, since the investment is made by the owner himself, the owner's equity (Clifford Moore, Capital) also increases. Therefore, the accounting equation is affected as follows:
Assets (Cash) increase = $15,000
Owner's Equity (Clifford Moore, Capital) increase = $15,000

Clifford Moore Is Starting His Computer Programming Business and Has