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Sally Smith decided to start a sea shell business. Her initial investment in the business consisted of $10,000 in cash. Record this transaction in the accounting equation of the new business by:
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Sally Smith decided to start a sea shell business. Her initial investment in the business consisted of $10,000 in cash. Record this transaction in the accounting equation of the new business by:

User Simianarmy
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20 votes

Final answer:

The initial investment of $10,000 in the sea shell business is recorded as an increase in assets in the accounting equation.

Step-by-step explanation:

In accounting, when Sally Smith starts her sea shell business with an initial investment of $10,000 in cash, it is recorded as a transaction in the accounting equation. The accounting equation is Assets = Liabilities + Equity. Since Sally's investment is in cash, it increases the Assets side of the equation. Therefore, the transaction is recorded as:

  • Assets +$10,000 (cash)

User Alexm
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