WAEC Accounting 2020 Paper

Concept:Introducing a private car into the business is treated as capital contributed by the owner.Explanation:The accounting equation for a business is:$$\text{Assets} = \text{Capital} + \text{Liabilities}$$The private car is an asset now owned by the business.Eze brings this car from his personal use into the firm.So the total assets of the business increase.Because the car is supplied by the owner, the owner’s capital also increases.Liabilities are not changed by this transaction.Profit is also not affected since the car is not income.Therefore, the two parts of the accounting equation that change are assets and capital.Answer:A. Assets and Capital