An investment of cash by an owner of a business increases assets and

Name: An investment of cash by an owner of a business increases assets and
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Question

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An investment of cash by an owner of a business increases assets and increases equity. This is because cash is an asset, and when the owner invests it into the business, the business's equity increases. There is no change in liabilities as liabilities are debts owed by the business and not affected by the owner's investment of cash.

An Investment of Cash by an Owner of a Business