Asked by Parker Smacchi on Mar 10, 2024
Verified
The gross increases in owner's equity attributable to business activities are called
A) assets
B) liabilities
C) revenues
D) expenses
Gross Increases
Refers to the total increment in volume or quantity before any deductions like taxes or expenses are applied.
Business Activities
Various actions undertaken by a company as part of its operation, including investing, financing, and operating activities.
Revenues
The income received by a business from its normal business operations, often from the sale of goods or services.
- Recognize the differences between assorted transaction categories and their implications for the accounting equation.
- Understand the classification and recording of business transactions and their impact on owner's equity.
Verified Answer
JP
Jonathan PicheMar 10, 2024
Final Answer :
C
Explanation :
Owners' equity increases when the business earns revenues. Revenues are the gross increases in assets or decreases in liabilities resulting from the business's typical operations. The other options, such as assets and liabilities, are not increases in owner's equity. Expenses are the costs of earning revenues, and they decrease owner's equity.
Learning Objectives
- Recognize the differences between assorted transaction categories and their implications for the accounting equation.
- Understand the classification and recording of business transactions and their impact on owner's equity.