Meghan started her business by investing $30,000 in cash.This transaction would
A) increase assets and increase owner's equity.
B) increase assets and increase liabilities.
C) increase one asset and decrease another asset.
D) decrease assets and decrease liabilities.

Question

Quizplus · Accepted Answer

When Meghan invests $30,000 in cash, it increases the cash asset on the balance sheet, which in turn increases total assets. Since she is the owner of the business and invested her own funds, her equity in the business also increases. Therefore, this transaction increases assets and owner's equity.

Meghan Started Her Business by Investing $30,000 in Cash