To increase the balance of the owner's capital account, you would?

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Prepare for the YouScience Accounting 1 Test. Enhance your skills with interactive flashcards, multiple choice questions, and detailed explanations. Get exam-ready efficiently!

Multiple Choice

To increase the balance of the owner's capital account, you would?

Explanation:
Owner’s capital is part of the owner’s equity and carries a credit balance. Increases to equity are recorded with credits, while decreases use debits. So to raise the balance of the owner's capital account, you would credit that account. For example, when the owner contributes cash, you debit Cash and credit Owner’s Capital, which increases the owner’s claim on the business. Debiting the account would decrease it, not increase it.

Owner’s capital is part of the owner’s equity and carries a credit balance. Increases to equity are recorded with credits, while decreases use debits. So to raise the balance of the owner's capital account, you would credit that account. For example, when the owner contributes cash, you debit Cash and credit Owner’s Capital, which increases the owner’s claim on the business. Debiting the account would decrease it, not increase it.

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