An owner contributes $50,000 to expand the business. This transaction wouldincrease expensesincrease capitalincrease incomedecrease income

Step 1: Break Down the Problem

To analyze the impact of the owner's contribution of $50,000 to expand the business, we need to understand the financial implications of this transaction on the accounting equation and related financial statements.

Step 2: Relevant Concepts

The owner's contribution of cash to the business is treated as an increase in capital (or equity) in the business's financial statements. This does not directly affect income or expenses but rather adds to the owner's equity.

Step 3: Analysis and Detail

When an owner contributes capital:

• Equity Increase: The business's equity increases by $50,000. This reflects the owner's investment in the business.
• No Direct Effect on Income or Expenses: This transaction does not affect the income statement immediately, as it is not an operational income or expense. It only affects the balance sheet.

Step 4: Verify and Summarize

Thus, the correct impact of this transaction is that it increases capital. There are no changes to income or expenses from this specific transaction.

Final Answer

The transaction would increase capital.