Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. Use only one letter for each element. You do not need to enter amounts.Increase = IDecrease = DNo Effect = NTaylor Bennett began his sole proprietorship on February 28, Year 1 by contributing $25,000 of his own money to the business. Indicate the effects of this transaction on the financial statements.AssetsLiabilitiesEquityRevenuesExpensesNetIncomeCash Flow? ?????
What will be an ideal response?
(I) (N) (I) (N) (N) (N) (I)
The contribution will increase the proprietorship's assets (cash) and its equity (Bennett, capital). It is reported as a cash inflow from financing activities on the statement of cash flows.
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