Jane Is an Accountant Operating as a Sole Proprietor

Multiple Choice

Jane is an accountant operating as a sole proprietor. On 1 February she does some work for a client who pays her $320 in cash. Which of the following represents the effect of this transaction on the accounting equation?

A) Increase in cash at bank $320; decrease in liability accounts payable $320.
B) Increase in cash at bank $320; increase in equity $320.
C) Increase in cash at bank $320; increase in asset accounts receivable $320.
D) Increase in cash at bank $320; increase in liability accounts payable $320.