Final answer:
The question pertains to the impact of a $5,000 investment on a business's balance sheet, specifically within the T-account framework. The asset account and owner's capital account are both increased due to the investment, and this is part of broader accounting practices where assets must balance with liabilities and net worth.
Step-by-step explanation:
The question from the student involves understanding how certain financial transactions affect the accounts on a company's balance sheet. Specifically, when Alice Roberts invested $5,000 in her business, Roberts Employment Agency, two accounts are affected on the T-account balance sheet: Cash in Bank and Alice Roberts, Capital. When Alice invests her own money, Cash in Bank, an asset account, is increased with a debit entry, reflecting the incoming funds. Conversely, the owner’s capital account, Alice Roberts, Capital, is increased with a credit entry, indicating Alice's increased equity in the business.
On a broader scope, the T-account framework is a fundamental concept in accounting, used for tracking the effects of transactions on individual accounts. It consists of two sides: the left side represents assets while the right side shows liabilities and net worth. The total assets should always equal the sum of liabilities and net worth. When a bank, for instance, makes a loan, it records the loan as an asset since it will generate income through interest, and the issue of a cashier's check leads to an increase in both deposits and reserves at the receiving bank.