Homework Help Question & Answers

Max decides to open his own ice-cream store and deposits $25 000 into his new business...


Max decides to open his own ice-cream store and deposits $25 000 into his new business bank account on 1 October. The effect
Max decides to open his own ice-cream store and deposits $25 000 into his new business bank account on 1 October. The effect of this transaction on the accounting equation is: Select one: O a Assets increase by $25 000; Equity decreases by $25 000. b. Assets increase by $25 000; Liabilities increase by $25 000. C Assets decrease by $25 000; Equity decreases by $25 000. O d. Assets increase by$25 000; Equity increases by $25 000
0 0
Next > < Previous
ReportAnswer #1

Investing money in business is equity.

Cash on assets side increases with $25,000

Equity on Stockholders equity and liabilities increases by $25,000

Assets increases by $25,000, Equity increases by $25,000

Option d.

Know the answer?
Add Answer to:
Max decides to open his own ice-cream store and deposits $25 000 into his new business...
Your Answer: Your Name: What's your source?
Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • On November 15, 20x2, Trink Ltd. paid $6819 to settle an account payable resulting from the...

    On November 15, 20x2, Trink Ltd. paid $6819 to settle an account payable resulting from the purchase of goods on account in October 20x2. What is the effect of this business transaction on the accounting equation of Trink? Select one: a. Assets decrease $6819, liabilities decrease $6819, and equity does not change o b. Assets increase $6819, liabilities increase $6819, and equity does not change C. Assets decrease $6819, liabilities decrease $6819, and equity decreases $6819 O d. Assets decrease...

  • i) A Business owner takes money out of his business in the form of a loan...

    i) A Business owner takes money out of his business in the form of a loan and gives the business a long-term promissory note. Which of the following would be the most conservative approach to treating this transaction from the point of view of a lender? A) Decrease assets and decrease equity by the amount of the note receivable. B) Decrease assets and decrease liabilities by the amount of the note receivable C) Increase liabilities and decrease equity by the...

  • On November 15, 20x2, Trink Ltd. paid $4847 to settle an account payable resulting from the...

    On November 15, 20x2, Trink Ltd. paid $4847 to settle an account payable resulting from the purchase of goods on account in October 20x2. What is the effect of this business transaction on the accounting equation of Trink? Select one: a. Assets increase $4847, liabilities increase $4847, and equity does not change b. Assets decrease $4847, liabilities do not change, and equity decreases $4847 c. Assets decrease $4847, liabilities decrease $4847, and equity does not change d. Assets decrease $4847,...

  • You operate a lawn care business. On May 1, 20x4, one of your customers paid you...

    You operate a lawn care business. On May 1, 20x4, one of your customers paid you $345 for lawn care for the summer of 20x4. What is the effect of this transaction on the accounting equation? Select one: a. Assets increase by $345 and shareholders' equity increases by $345 b. There is no effect on the accounting equation O C. Assets increase by $345 and liabilities increases by $345 O d. Liabilities increase by $345 and shareholders' equity increases by...

  • On January 1, Cowboy Ice Cream declared a $3,000 cash dividend to be paid on January...

    On January 1, Cowboy Ice Cream declared a $3,000 cash dividend to be paid on January 31 to shareholders of record on January 15. What is the effect on Cowboy Ice Cream's financial statements on January 1? (Select all that apply) Financing cash outflow of $3,000 Dividends Payable decreases by $3,000 No effect on the financial statements Net Income decreases by $3,000 Dividends decrease by $3,000 Retained Earnings decrease by $3,000 Dividends Payable increases by $3,000 Cash decreases by $3,000...

  • Business Forms and the Accounting Equation I have changed the numbers so that I am not...

    Business Forms and the Accounting Equation I have changed the numbers so that I am not plagiarizing. I am just trying to learn this a more simpler way. please help by showing all work. Id like to depend on myself to do this. thank you A business is an organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers. A business entity may take the form of...

  • 11. Jason Repair Company incurred $1.500 as an advertising expense and promised to pay the advertising...

    11. Jason Repair Company incurred $1.500 as an advertising expense and promised to pay the advertising agency within 30 days. The company is a sole proprietorship. Which of the following will decrease as a result of this transaction? A) Assets B) Jason, Capital C) Liabilities D) Revenues 12. Montgomery Equipment Rental Company received $1,000 cash from a customer, the amount was owed to the business from the previous month. What is the effect of this transaction on the accounting equation?...

  • Transaction Assets = Liabilities + Equity Beginning $0 = $0 + $0 Investment in the Business...

    Transaction Assets = Liabilities + Equity Beginning $0 = $0 + $0 Investment in the Business The company issue stock in exchange for $25,000 cash. This increases the assets of the business from its zero balance. The owners (stockholders) have a claim on the assets, so equity also increases from its zero balance. Make sure the equation stays in balance. $ = $ + $ Borrow Cash The company borrows $12,500 cash from the local bank. This increases the assets...

  • QUESTION5 MULTIPLE CHOICE QUESTIONS This question consists of five (5) multiple-choice questions. Only one option for...

    QUESTION5 MULTIPLE CHOICE QUESTIONS This question consists of five (5) multiple-choice questions. Only one option for each question is correct. Indicate the chosen option in your exam script next to the question number in brackets, for example, Question 6 (c). 1 The one underlying assumption for financial statements is: (b) verifiability (c) timeliness (d) going concem (e) understandability 2. Inventory with a cost price of R1 000 was sold for cash R2 100. Which one of the following options illustrates...

  • Problem 3-6 Fred Klein started his own business recently. He began by depositing $5,000 of his...

    Problem 3-6 Fred Klein started his own business recently. He began by depositing $5,000 of his own money (equity) in a business account. Once he'd done that his balance sheet was as follows. Liabilities and Assets Equity Cash $5,000 Equity $5,000 Total Assets $5,000 Total $5,000 During the next month, his first month of business, he completed the following transactions. (All payments were made with checks out of the bank account.) Purchased $4,000 worth of inventory, paying $1,500 down and...

Free Homework App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.