Which of the following transactions decreases both assets and owner's equity?
A) Withdrawal of cash by the owner
B) Advance payment made for insurance
C) Receipt of a phone bill, to be paid at a later time
D) Payment of a liability

Question

Quizplus · Accepted Answer

When the owner withdraws cash from the business, it decreases the cash (an asset) and also decreases the owner's equity, as it is considered a distribution of equity to the owner.

Which of the Following Transactions Decreases Both Assets and Owner's