Proprietorships and Owner's Equity
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Questions and Answers

Which of the following actions would increase owner's equity in a proprietorship?

  • Money is borrowed from the bank.
  • The owner withdraws money for personal use.
  • A service is provided to a customer on account.
  • Cash is collected from a customer who had previously been billed for services. (correct)

    • Which of the following actions would decrease owner's equity in a proprietorship?

  • A service is provided to a customer on account.
  • Cash is collected from a customer who had previously been billed for services.
  • The owner withdraws money for personal use. (correct)
  • Money is borrowed from the bank.

    • Which of the following actions would have no impact on owner's equity in a proprietorship?

  • A service is provided to a customer on account.
  • The owner withdraws money for personal use.
  • Money is borrowed from the bank. (correct)
  • Cash is collected from a customer who had previously been billed for services.

    • Which of the following actions would increase owner's equity in a proprietorship?

    <p>Cash is collected from a customer who had previously been billed for services</p> Signup and view all the answers

    Which of the following actions indicates that a company has a profit?

    <p>Revenues exceed expenses for the period</p> Signup and view all the answers

    Which of the following is NOT a component of owner's equity?

    <p>Existing debts and obligations of the company</p> Signup and view all the answers

    Which of the following actions would decrease liabilities and increase owner's equity?

    <p>Decrease liabilities and increase owner's equity</p> Signup and view all the answers

    Which financial statement reports the assets, liabilities, and owner's equity at a specific date?

    <p>Balance sheet</p> Signup and view all the answers

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