Question $34$

If owners contribute $$50,000$ to start a new business what is the effect on the accounting equation?

Assets increase $$50,000$; liabilities increase $$50,000$; no effect on equity.

Assets increase $$50,000$; no effect on liabilities; equity increases $$50,000.$

Assets decrease $$50,000$; liabilities decrease $$50,000$; no effect on equity.

Assets decrease $$50,000$; no effect on liabilities; equity decreases $$50,000.$