Question

Indicate the effect of each transaction on the accounting equation by choosing the appropriate letter from the following list: Increase in an asset, decrease in another asset. Increase in an asset, increase in a liability. Increase in an asset, increase in owner's equity. Decrease in an asset, decrease in a liability. Decrease in an asset, decrease in owner's equity.

Answer 1

Increase in an asset, increase in owner's equity.

Step-by-step explanation:

• Accounting equation is assets + liabilities = owners stockholders equity. The investment of owners in the company will increase the assets as when the company borrows money from the banks the company assets also raise equity.