Helen Decides to Open Her Own Ice-Cream Store and Deposits

question 24

Multiple Choice

Helen decides to open her own ice-cream store and deposits $25 000 into her new business bank account on 1 October. The effect of this transaction on the accounting equation is:

• A) Assets increase by$25 000; Equity increases by $25 000.
• B) Assets increase by $25 000; Equity decreases by $25 000.
• C) Assets increase by $25 000; Liabilities increase by $25 000.
• D) Assets decrease by $25 000; Equity decreases by $25 000.

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Definitions:

Commercial

Relating to or engaged in commerce; characterized by the intent to profit from the buying, selling, or exchanging of goods and services.

Own Identity

The distinct characteristics, values, and beliefs that define an individual, group, or organization and differentiate it from others.

Nonprofit Organizations

Entities that operate for charitable, educational, or social purposes rather than for profit, reinvesting surplus revenues in their mission.

Organizational Units

Smaller, specialized sections within a larger organization, each with specific roles and responsibilities.