Tim contributes capital into his business.The two accounts affected are:
A) an asset and a liability.
B) an asset and an equity.
C) a liability and an equity.
D) two asset accounts.

Question

Quizplus · Accepted Answer

When Tim contributes capital into his business, there is an increase in the assets of the business (cash or equipment, for example) and an increase in the equity of the business (represented by Tim's investment into the business). Therefore, the two accounts affected are an asset and an equity.

Tim Contributes Capital into His Business