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

Question

Quizplus · Accepted Answer

Owner's investments and owner's withdrawals directly affect owner's equity, while revenues and expenses indirectly affect owner's equity through retained earnings. Therefore, choice B is the most comprehensive answer as it includes all four of these transactions.

Transactions Affecting Owner's Equity Include