Any additional investments by the owner should be shown as a(n)
A) subtraction on the Statement of Owner's Equity.
B) subtraction on the Income Statement.
C) addition on the Income Statement.
D) addition on the Statement of Owner's Equity.

Question

Quizplus · Accepted Answer

Any additional investments made by the owner are considered capital contributions and are therefore shown as additions on the Statement of Owner's Equity. This statement reflects changes in the owner's equity over a specific period, including any investments made by the owner. The Income Statement, on the other hand, reflects a company's revenues and expenses over a specific period, while additional investments made by the owner would have no direct impact on the income earned during that period. Therefore, B and C are incorrect choices, and A is incorrect because additional investments are not subtracted but added to the owner's equity.

Any Additional Investments by the Owner Should Be Shown as A(n)