The owner invested personal equipment in the business.To record this transaction:
A)debit Equipment and credit Revenue.
B)debit Accounts Payable and credit Equipment.
C)debit Equipment and credit Capital.
D)credit Equipment and debit Capital.

Question

Quizplus · Accepted Answer

When the owner invests personal equipment in the business, it increases the value of equipment in the business. Therefore, the transaction should be recorded by debiting Equipment account and crediting Capital account of the owner as it increases the value of owner's equity in the business. Option A is incorrect because Revenue is not affected by this transaction. Option B is incorrect as there is no liability to record. Option D is also incorrect as the capital account will be credited and not debited.

The Owner Invested Personal Equipment in the Business