Question

Which of the following transactions would have no impact on owner's capital?

• A. Purchase of land from the proceeds of a bank loan
• B. Withdrawal of profits
• C. Net loss
• D. Cash brought in by owner as additional capital

Answer 1

The correct option is A Purchase of land from the proceeds of a bank loan

Purchase of land from the proceeds of a bank loan would have no impact on owner's capital. The entries to be passed on purchase of land are
Cash A/c Dr.
To Bank Loan A/c On purchase of Land the following entry will be passed-
Land A/c Dr.
To Cash A/c
Thus no impact on owner's capital