the journal entry debiting cash and crediting capital would be a result of a(n)
Mathematics · Middle School · Mon Jan 18 2021
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The journal entry debiting cash and crediting capital typically occurs when a business owner invests personal funds into the business. This represents a capital contribution or owner's equity transaction. The specific term used for this entry is "Owner's Investment" or "Owner's Equity Contribution."
The journal entry would look like this:
Debit: Cash Credit: Owner's Capital
This entry reflects an increase in the company's assets (cash) and owner's equity. It's a common transaction when an owner injects personal funds into the business to provide additional capital.