Jane Is an Accountant Operating as a Sole Proprietor

question 4

Multiple Choice

Jane is an accountant operating as a sole proprietor. On 1 February she does some work for a client on credit who she invoices for $120. Which of the following represents the effect of this transaction on the accounting equation?

• A) Increase in cash at bank $120; decrease in liability accounts payable $120.
• B) Increase in equity $120; increase in liability accounts payable $120.
• C) Increase in asset accounts receivable $120; increase in equity $120.
• D) Increase in cash at bank $120; increase in equity $120.

---

Definitions:

Hydrochloric Acid

A strong, corrosive acid that is a solution of hydrogen chloride (HCl) in water, used industrially and in digestion in the stomach.

Deactivated

A state in which a biological or chemical process, entity, or system is rendered inactive or non-functional.

Proteins

Large, complex molecules essential for the structure, function, and regulation of the body's tissues and organs.

Lipids

A diverse group of naturally occurring molecules that include fats, waxes, and oil, serving as energy storage and structural components of cell membranes.