The owner invested personal equipment in the business. To record this transaction
A. debit Accounts Payable and credit Equipment
B. debit Equipment and credit Accounts Payable
C. credit Equipment and debit Capital
D. debit Equipment and credit Capital
Answers
Answered by
26
D option is correct As it increases asset as well as capital
Answered by
9
To record this transaction debit equipment and credit capital.
Option D
Explanation:
When we are doing accounting or any sort of auditing job the first thing you should consider is the fact that we should only do transactions from the perspective of firm.
Here the owner of the firm has invested his personal equipment into his business which from the business' point of view is an increase in assets and a capital expenditure from the firm's point of view therefore making this particular journal entry correct and valid for the particular situation.
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