The owner of an entity pays cash into the company's cash at bank account. The effect of this is to record an increase to cash on the left-hand side of the worksheet and an increase to equity on the right-hand side of the worksheet. This is the same as recording a debit on the left-hand side of the T account Cash at Bank and a credit on the right-hand side of the T account Owners' Equity.

Question

Quizplus · Accepted Answer

When the owner of an entity pays cash into the company's cash at bank account, it is recorded as a debit on the left-hand side (increase to cash) of the T account Cash at Bank and a credit on the right-hand side (increase to equity) of the T account Owners' Equity. This is reflected in the same way on a worksheet, with an increase to cash on the left-hand side and an increase to equity on the right-hand side. Therefore, the statement is true.

The Owner of an Entity Pays Cash into the Company's