Owner Contribution
Definition
An owner contribution is money or property the owner puts into the business. It increases equity and is not revenue.
Example
The owner deposits $15,000 of personal money into the business checking account. Cash increases $15,000 and Owner Equity increases $15,000. No revenue is recorded.
Why It Matters
Recording an owner contribution as revenue overstates income and understates equity. It changes the wrong part of the books.