Drew and Tammy decide to start a new cake-decorating business.They each contribute $10,000 to get the business off the ground.This money is considered
A) sales revenue.
B) long-term debt.
C) equity capital.
D) short-term financing.
E) cash flow.

Question

Quizplus · Accepted Answer

The $10,000 contribution from each partner is considered equity capital, as it represents their ownership in the business. This is different from long-term debt or short-term financing, which would require repayment with interest, and is not considered sales revenue or cash flow, which are the result of the business operations.

Drew and Tammy Decide to Start a New Cake-Decorating Business