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Summary QuestionWhen an owner invests cash in the business, which accounts are used in this tra

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When an owner invests cash in the businessQuestionWhen an owner invests cash in the business, which accounts are used in this transaction? Question 1Select one: a. Increasing Cash; increasing Owner's Capital b. Increasing Cash; increasing Owner's Withdrawals c. Increasing Service Revenue; decreasing Net Worth d. Increasing Cash; increasing Service RevenueAnswer & ExplanationThe correct answer is: a. Increasing Cash; increasing Owner's CapitalExplanation:When an owner invests cash in the business, it affects two accounts:1.Cash Account:oThis account represents the amount of cash the business has on hand.oWhen the owner invests cash into the business, this account increases because there is more cash available to use.2.Owner's Capital Account:oThis account reflects the owner's equity or investment in the business.oWhen an owner contributes personal funds to their business, it increases their stake or equity in that business.The

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Question


When an owner invests cash in the business, which accounts are used in this

transaction? Question 1Select one: a. Increasing Cash; increasing Owner's

Capital b. Increasing Cash; increasing Owner's Withdrawals c. Increasing

Service Revenue; decreasing Net Worth d. Increasing Cash; increasing Service

Revenue




Answer & Explanation


The correct answer is: a. Increasing Cash; increasing Owner's Capital


Explanation:


When an owner invests cash in the business, it affects two accounts:


1. Cash Account:


o This account represents the amount of cash the business has on

hand.


o When the owner invests cash into the business, this account

increases because there is more cash available to use.

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