The controller for Tires and More,Inc.has recorded the following transactions during the month: the owner established the business with a $20,000 investment on the 1st of the month;the company recorded $36,000 of revenue for tires and services provided during the month;and expenses of $22,000 were recorded for the month.Additionally,on the last day of the month the owner withdrew $2,000 for personal expenses.What is the balance of Owner's Equity at the end of the month,and is the balance a debit or a credit?
A)$32,000 debit.
B)$32,000 credit.
C)$18,000 credit.
D)$36,000 debit.

Question

Quizplus · Accepted Answer

Owner's Equity increases with the initial investment ($20,000) and revenue ($36,000), and decreases with expenses ($22,000) and owner's withdrawals ($2,000). The net effect is an increase of $32,000, which is a credit balance in Owner's Equity.

The Controller for Tires and More,Inc