Question

Alex invested $30,000 in cash in his business. How will this entry be posted in the ledger accounts? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)The $30,000 will be posted to the credit side of the Cash account.The $30,000 will be posted to the debit side of the Cash account.The $30,000 will be posted to the debit side of the Common Stock account.The $30,000 will be posted to the credit side of the Common Stock account.

Answer 1

In accounting, Alex's $30,000 investment in his business will be recorded with a debit to the Cash account and a credit to the Common Stock (or similar equity) account. This reflects an increase in both the company's assets and owner's equity.

Step-by-step explanation:

When Alex invests $30,000 in cash into his business, the appropriate accounting entries will reflect a change in both the asset and equity sections of the business ledger. The investment increases the company's cash account and the owner's equity (typically recorded in a common stock account if the business is incorporated).

The correct entries would be:

• The $30,000 will be posted to the debit side of the Cash account. This reflects an increase in the company's assets.
• The $30,000 will be posted to the credit side of the Common Stock account (or a similarly named equity account if not a corporation). This reflects an increase in the company's equity.

The double-entry system of accounting requires that debits and credits must balance. Therefore, the $30,000 debit to cash must be accompanied by a $30,000 credit to an equity account to show that the owner has a claim against those additional assets.

Answer 2

The $30,000 will be posted to the debit side of the Cash account

The $30,000 will be posted to the credit side of the Common Stock account

Step-by-step explanation:

The journal entry is shown below:

Cash A/c Dr $30,000

To Common stock A/c $30,000

(Being the cash is invested)

We simply debited the cash account and credited the capital account for $30,000 so that the correct posting can be done. So while preparing the ledger accounts we post the amount to the debit side of the cash account and credit side of the common stock account