Question

Michael anderson is starting his computer programming business and has deposited in initial investment of $15,000 into the business cash account. identify how the accounting equation will be affected.

Answer 1

The accounting equation will be affected as follows there will be increase in the assets in the form of cash and an increase in the owner's equity that is of Michael Anderson. Owners equity is the amount that the owners invest in the business excluding the withdrawal in the process and adding the net income or net loss (whatever is the result at the end).