The amount of owners' equity in a business is not affected by:
A)The percentage of total assets held in cash.
B)The investments made in the business by the owner.
C)The profitability of the business.
D)The amount of dividends paid to stockholders.

Question

Quizplus · Accepted Answer

The amount of owners' equity is primarily affected by investments made by the owner (B), the profitability of the business (C), and dividends paid to stockholders (D). The percentage of total assets held in cash (A) does not directly affect the amount of owners' equity; it merely represents how assets are allocated.

The Amount of Owners' Equity in a Business Is Not