Owner withdrawals always decrease equity.

Name: Owner withdrawals always decrease equity.
Brand: Quizplus
Rating: 4.8 (38 reviews)

Question

Quizplus · Accepted Answer

Owner withdrawals, or funds taken out of the business by the owner, reduce the amount of assets in the business and therefore decrease the amount of equity. This is because equity is calculated by subtracting liabilities from assets, and owner withdrawals reduce the assets available.

Owner Withdrawals Always Decrease Equity