Mary Ann Powers is starting her computer programming business and deposited as an investment $25,000 into the business checking account. What is one effect this will have on the accounting equation?

Question

Increase in owner's equity

Increase in liabilities

Decrease in stock

Increase in revenues

Answer 1

When Mary Ann Powers deposits $25,000 into her business checking account as an investment, it results in an increase in the owner's equity. This is because the investment increases her stake in the business, which is reflected as an increase in equity.

Thus, the correct effect on the accounting equation would be:

Increase in owner's equity.