Liz, After Qualifying at University and Having Several Years' Experience

Multiple Choice

Liz, after qualifying at university and having several years' experience decides to set up her own dental practice. On 1 March she deposits $25 000 into a bank account she has opened for the practice. Which of the following represents the effect of this transaction on the accounting equation?

A) Increase in assets of $25 000; increase in equity of $25 000.
B) Increase in assets of $25 000; decrease in equity of $25 000.
C) Increase in assets of $25 000; increase in liabilities of $25 000.
D) Decrease in assets of $25 000; increase in equity of $25 000.