Transactions affecting owner's equity include
A) owner's investments and payment of liabilities
B) owner's investments, owner's withdrawals, earning of revenues, and incurrence of expenses
C) owner's investments, earning of revenues, incurrence of expenses, and collection of accounts receivable
D) owner's withdrawals, earning of revenues, incurrence of expenses, and purchase of supplies on account

Question

Quizplus · Accepted Answer

Owner's equity is affected by owner's investments, owner's withdrawals, earning of revenues, and incurrence of expenses. Owner's investments and withdrawals directly impact the balance of owner's equity. Earning of revenues increases owner's equity, while incurrence of expenses decreases it. Therefore, option B is the best choice.

Transactions Affecting Owner's Equity Include