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Capital brought in by the proprietor is an example of
- a)Increase in asset and increase in liability.
- b)Increase in liability and decrease in asset.
- c)Increase in asset and decrease in liability.
- d)Increase in one asset and decrease in another asset.
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Capital brought in by the proprietor is an example ofa)Increase in ass...
Increase in Capital Brought in by the Proprietor
Increase in capital brought in by the proprietor refers to the amount of money invested by the owner into the business. This can be in the form of cash or other assets that are contributed to the business. The increase in capital has a direct impact on the financial position of the business and is recorded in the accounting records.
Impact on Assets and Liabilities
The increase in capital brought in by the proprietor has a direct impact on the assets and liabilities of the business. It is important to understand the impact of this transaction on the financial position of the business. The following points explain the impact of the increase in capital on assets and liabilities:
- Increase in Assets: The increase in capital brought in by the proprietor results in an increase in the cash balance of the business. This increase in cash is recorded as an increase in the assets of the business.
- Increase in Liabilities: The increase in capital brought in by the proprietor does not result in an increase in liabilities. This is because the increase in capital is not borrowed money and does not create an obligation to repay the amount to any external party.
Option A is Correct
Based on the above explanation, it is evident that the increase in capital brought in by the proprietor results in an increase in assets and does not result in an increase in liabilities. Therefore, the correct option is A, which states that the increase in capital brought in by the proprietor is an example of an increase in asset and increase in liability.
Increase in capital brought in by the proprietor refers to the amount of money invested by the owner into the business. This can be in the form of cash or other assets that are contributed to the business. The increase in capital has a direct impact on the financial position of the business and is recorded in the accounting records.
Impact on Assets and Liabilities
The increase in capital brought in by the proprietor has a direct impact on the assets and liabilities of the business. It is important to understand the impact of this transaction on the financial position of the business. The following points explain the impact of the increase in capital on assets and liabilities:
- Increase in Assets: The increase in capital brought in by the proprietor results in an increase in the cash balance of the business. This increase in cash is recorded as an increase in the assets of the business.
- Increase in Liabilities: The increase in capital brought in by the proprietor does not result in an increase in liabilities. This is because the increase in capital is not borrowed money and does not create an obligation to repay the amount to any external party.
Option A is Correct
Based on the above explanation, it is evident that the increase in capital brought in by the proprietor results in an increase in assets and does not result in an increase in liabilities. Therefore, the correct option is A, which states that the increase in capital brought in by the proprietor is an example of an increase in asset and increase in liability.
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Capital brought in by the proprietor is an example ofa)Increase in ass...
Increase in asset : proprietor invests the money who is treated as a separate person from business and that invested money should be paid by the business that is why increase in liability So answer is 'A'
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Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in asset.c)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer?
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Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in asset.c)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in asset.c)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in asset.c)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer?.
Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in asset.c)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in asset.c)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in asset.c)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer?.
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