The ending balance of owner's capital is calculated as:
A) Owner's capital account balance plus net income minus the withdrawals account balance.
B) Owner's capital account balance minus net loss plus the withdrawals account balance.
C) Net income minus the withdrawals account balance.
D) Assets plus liabilities.
E) None of these answers is correct.

Question

Quizplus · Accepted Answer

The ending balance of owner's capital is the beginning balance plus net income less any withdrawals. Therefore, option A is correct, as it adds the beginning balance of owner's capital and net income and subtracts any withdrawals made by the owner. Option B is incorrect because it subtracts a net loss instead of adding net income. Option C is incorrect because it only subtracts withdrawals without adding the beginning balance and net income. Option D is incorrect because it calculates the total assets and liabilities but not owner's capital.

The Ending Balance of Owner's Capital Is Calculated As