Sales proceed of own flat put in business by proprietor would cause ____________.

cash in hand and owners capital to increase

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external liability to decrease

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total liabilities to increase

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total assets remain unchanged

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Solution

The correct option is A cash in hand and owners capital to increase
The owner's capital is the part of the accounting equation that represents the liquid cash that the company has earned, which it has on hand for daily operations as well as capital investments. Sales proceed of own flat put in business will increase cash in hand of business (as it is capital investment) and ultimately increases owners capital as it is the addition to the existing cash balance of business.

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Similar questions

A ___ Working capital turnover ratio indicates that management is being extremely efficient in using a firm's short-term assets and liabilities to support sales.

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