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JAMB Principles of Accounts 2024 Question 34

Question 34

Accounting Equation

The capital of a sole proprietor can be increased by

  1. A.debiting the cash account
  2. B.crediting the cash account
  3. C.debiting the capital account
  4. D.crediting the capital account
Show the answer and explanation

Answer: D (crediting the capital account)

Explanation

Capital is a credit balance, so an increase in capital is recorded by crediting the capital account.