Question

Determine the effect on the balance sheet after the following transaction. You sell a product purchased for $750 for $1,500.00. This means: Cash increases by $1500 Cash decreases by $750 Owner’s equity increases by $750 Owner’s equity decreases by $750/

Answer 1

Owner's equity increases by 750$

Answer 2

Answer:

Third option is correct. Owner’s equity increases by $750.

Step-by-step explanation:

Owner's equity is the difference between owner's investment and his withdrawal.

If i sell a product purchased of $750 for $1,500.  It means the amount of investment is $1500 and the amount of withdrawal is $750.

$E=1500-750=750$

Since it is positive, therefore the owner's equity increased by $750.

When the product purchased of $750 sell for $1,500, we get the profit of $750.

Therefore, third option is correct. Owner’s equity increases by $750.