After posting the first closing entry to the owner's capital account, the balance will be increased (decreased) by
A) zero
B) owner's equity
C) revenues for the period
D) the net income (net loss) for the period

Question

Quizplus · Accepted Answer

The balance in the owner's capital account represents the owner's equity in the business. The net income (or net loss) for the period contributes to the owner's equity, and therefore affects the balance in the capital account. When the first closing entry is made to transfer the net income (or net loss) to the capital account, the balance will be increased (or decreased) accordingly.

After Posting the First Closing Entry to the Owner's Capital