Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 15 - No. 20)
What is the impact on the accounting equation if a business owner invests cash into the business?
Assets increase; liabilities increase.
Assets increase; equity increases.
Assets decrease; liabilities decrease.
Liabilities increase; equity decreases.
Explanation
When the owner invests cash, the business's assets (cash) increase, and the owner's equity also increases.
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