Assume a company has a net income that exceeds the owner's drawing for the current year. The owner's Capital account
A) will have a zero balance after the closing entries are completed.
B) will increase.
C) will decrease.
D) will remain the same as the beginning balance.
E) It is impossible to tell with the information provided.

Question

Quizplus · Accepted Answer

If a company's net income exceeds the owner's drawing for the current year, it means the company has generated more revenue than what was taken out by the owner. Therefore, the Capital account will increase, reflecting the owner's share of the company's profits.

Assume a Company Has a Net Income That Exceeds the Owner's