Question

What is the proper entry to show the owner making an investment in the company? A...

What is the proper entry to show the owner making an investment in the company?
A a credit to cans and a debit to capital
B a debit to cash and a credit to capital
C. A debit to cash and a credit to revenue
D a credit to cash and a debit to revenue
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Answer #1

Hello Sir/ Mam

YOUR CORRECT ANSWER IS OPTION B : a debit to cash and a credit to capital

Owner making investment in company means that owner is introducing capital in the company.

As owner will introduce new capital in cash, both the Cash A/C and Capital A/C will increase.

As the Cash A/C has debit balance and Capital A/c has credit balance,

the correct entry will be :

Debiting Cash and Crediting Capital.

I hope this solves your doubt.

Do give a thumbs up if you find this helpful.

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