Which of the following entries records the investment of cash by Taylor Thomas, owner of a proprietorship?
A) debit Taylor Thomas, Capital; credit Accounts Receivable
B) debit Cash; credit Taylor Thomas, Capital
C) debit Taylor Thomas, Drawing; credit Cash
D) debit Cash; credit Taylor Thomas, Drawing

Question

Quizplus · Accepted Answer

When the owner of a proprietorship invests cash, it increases the owner's equity in the business. Therefore, we would debit Cash (asset) and credit the owner's equity account, which is typically named after the owner (in this case, Taylor Thomas, Capital). Option B correctly reflects this by debiting Cash and crediting Taylor Thomas, Capital.

Which of the Following Entries Records the Investment of Cash