Question
On 1 January, John invested his savings of K25000 and a personal bank loan of K40000 to start in the new business.
1. What accounts are affected?
2. What type of accounts are they?
1. What accounts are affected?
2. What type of accounts are they?
Answers
GPT 3.5
1. The accounts affected would be:
- Cash account: to record the K25000 investment
- Loan account: to record the K40000 personal bank loan
2. The cash account is an asset account, representing the amount of cash John invested in the business. The loan account is a liability account, representing the amount of money John borrowed from the bank for the business.
- Cash account: to record the K25000 investment
- Loan account: to record the K40000 personal bank loan
2. The cash account is an asset account, representing the amount of cash John invested in the business. The loan account is a liability account, representing the amount of money John borrowed from the bank for the business.