The Journal Entry to Record an Investment by the Owner

question 93

Multiple Choice

The journal entry to record an investment by the owner would most commonly include:

• A) a debit to Cash and a credit to Fees Earned.
• B) a debit to Capital and a credit to Cash.
• C) a debit to Fees Earned and a credit to Capital.
• D) a debit to Cash and a credit to Capital.

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Definitions:

C Corporation

A legal structure for a corporation where the owners or shareholders are taxed separately from the entity, distinguishing the company as an independent legal entity under U.S. federal income tax law.

Demise of Owners

The situation where the owner(s) of a business pass away, creating potential uncertainty or transition phases for the business operation and ownership.

Sole Proprietorship

A company that is solely owned and run by one person, where the law does not differentiate between the proprietor and the business itself.

Legal Filing

The process of submitting documents to a court or official body to comply with legal requirements in a lawsuit or other legal proceedings.