If an owner makes a withdrawal of cash from a proprietorship, then
A) there has been a violation of accounting principles.
B) assets will decrease and owner's equity will increase.
C) assets will decrease and owner's equity will decrease.
D) assets will decrease and liabilities will increase.

Question

Quizplus · Accepted Answer

When an owner withdraws cash from a proprietorship, it is recorded as a decrease in the business's assets (cash) and a corresponding decrease in the owner's equity. This reflects the reduction in the business's resources and the owner's claim on those resources.

If an Owner Makes a Withdrawal of Cash from a Proprietorship