Jane Is an Accountant Operating as a Sole Proprietor

question 7

Multiple Choice

Jane is an accountant operating as a sole proprietor. On 1 February she does some work for a client who pays her $320 in cash. Which of the following represents the effect of this transaction on the accounting equation?

• A) Increase in cash at bank $320; decrease in liability accounts payable $320.
• B) Increase in cash at bank $320; increase in equity $320.
• C) Increase in cash at bank $320; increase in asset accounts receivable $320.
• D) Increase in cash at bank $320; increase in liability accounts payable $320.

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Definitions:

Crowdsourcing

The practice of engaging a 'crowd' or group for a common goal — often innovation, problem-solving, or efficiency.

Information

Data that has been organized and processed to provide meaning and improve decision-making.

Crowdsourcing

The method of gathering data, insights, or materials by requesting input from a broad audience, usually via the online community.

Physical Capital

Tangible assets such as buildings, machinery, and equipment that are used in producing goods and services.