Asked by Vaishnavi Surnis on Jun 15, 2024
Verified
Withdrawals decrease owner's equity and are listed on the income statement as a deduction from revenue.
Withdrawals
Money or assets taken out of a business by its owner(s) for personal use.
Owner's Equity
The ownership stake of shareholders or owners in a company's assets once all debts have been subtracted.
Income Statement
A financial statement that shows a company's revenues and expenses over a specific period of time, resulting in a net profit or loss.
- Comprehend how different types of transactions affect owner's equity.
- Understand the role of the drawing account and its impact on owner's equity.
Verified Answer
CC
Christy CmokoJun 15, 2024
Final Answer :
False
Explanation :
Withdrawals decrease owner's equity but are not listed on the income statement; they are recorded separately because they are not business expenses.
Learning Objectives
- Comprehend how different types of transactions affect owner's equity.
- Understand the role of the drawing account and its impact on owner's equity.