Question

Accounting Question - An investment of cash in a business by the share holders increases what?

Answer 1

a. stockholders Equity only
b. assets only
c. assets and stockholder's equity
d. assets and liabilities
e. assets and decrease stockholder's equity

Answer 2

cash is an asset
and since you're not "borrowing" it from bank/others, its NOT a liability

Answer 3

In light of above information, which options can you eliminate ?

Answer 4

and a

Answer 5

Very good !

Answer 6

So if you know what "stockholder's equity" is, you will be able to figure out the answer

Answer 7

shareholders are investing the cash, so that means their equity increases, right ?

Answer 8

so both "assets" and "stockholder's equity" accounts increase when shareholders invest money into the business

Answer 9

Is stockholders equity = total assets - total liabilities?

Answer 10

@ganeshie8

Answer 11

Yep!

Answer 12

a = b - c


when `b` increases, it forces `a` to increase as well

Answer 13

Ok! great :) Thank you soo much for explaining them to me! I am doing some homework and there are a few questions that are a little hard for me to understand.

Answer 14

@ganeshie8 - If I come across anymore that stump me would you mind if I asked you? :)

Answer 15

sure :) good luck with rest of the hw !

Answer 16

Thank you! :)