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In your names beach barkers, what account should be used to record owner investment?

a) Liabilities
b) Assets
c) Owner's Equity
d) Expenses

1 Answer

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Final answer:

An owner investment in a business, such as 'Beach Barkers', should be recorded in the Owner's Equity account. This account reflects the personal funds the owner puts into the business, which increases the owner's stake and total equity of the company.

Step-by-step explanation:

When an owner invests in their business, the transaction should be recorded in the Owner's Equity account. In accounting, Owner's Equity represents the owner's claims to the assets of the business and is shown in the equity section of the balance sheet. The investment increases the total equity of the business because it is money that the owner is committing to the business operations, essentially increasing the owner's stake in the company.

Therefore, when you record an owner investment for 'Beach Barkers' or any other business, you do not use the Liabilities, Assets, or Expenses account. Instead, you make an entry in the Owner's Equity account, which reflects the owner's personal investment into the business. It is crucial to accurately categorize transactions like this to maintain a clear financial picture of the business's health and to ensure that financial statements are prepared correctly.