If a company receives $13,500 from the owner to establish a proprietorship, the effect on the accounting equation would be:

Question

Answer

Liabilities increase $13,500 and equity decreases $13,500.

Answer

Assets increase $13,500 and liabilities decrease $13,500.

Answer

Assets increase $13,500 and equity increases $13,500.

Answer

Assets decrease $13,500 and equity decreases $13,500.

Answer

Assets increase $13,500 and liabilities increase $13,500.

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