If a Company Receives $12,000 from the Owner to Establish

Multiple Choice

If a company receives $12,000 from the owner to establish a proprietorship, the effect on the accounting equation would be:

A) Liabilities increase $12,000 and equity decreases $12,000.
B) Assets increase $12,000 and liabilities increase $12,000.
C) Assets decrease $12,000 and equity decreases $12,000.
D) Assets increase $12,000 and equity increases $12,000.
E) Assets increase $12,000 and liabilities decrease $12,000.