an owner investment of equipment into the business would:
a)have no effect on liabilities
b)have no effect on owner's equity
c)have no effect on total assets
d)increase net income
i think its "a".
you think correctly.
To determine the correct answer, we need to understand the impact of an owner's investment of equipment into the business.
When an owner invests equipment into the business, it has the following effects:
a) No effect on liabilities: This is incorrect. The investment of equipment does not impact liabilities directly, as liabilities are typically related to obligations and debts owed by the business to external parties.
b) No effect on owner's equity: This is incorrect. The investment of equipment would increase the value of the owner's equity. Owner's equity represents the owner's share of the business's assets after deducting liabilities.
c) No effect on total assets: This is also incorrect. The investment of equipment would increase the overall value of the business's assets. Assets represent the resources owned by the business, and adding equipment would increase the total asset value.
d) Increase net income: This is incorrect. The investment of equipment would not directly impact net income. Net income is determined by deducting expenses from revenues, and it is usually recorded as a result of the business's operations rather than owner investments.
Based on the explanations above, the correct answer is NOT "a." To determine the correct answer, we can conclude that the investment of equipment into the business would:
- Increase owner's equity
- Increase total assets
Therefore, the correct answer would be:
c) Have no effect on total assets