Asked by Kevin Starrett on May 17, 2024
Verified
Owner's equity is decreased by
A) assets.
B) revenues.
C) expenses.
D) liabilities.
Expenses
Costs incurred by a business in the process of earning revenue, such as salaries, rent, and utilities.
Assets
Resources owned or controlled by a company with expected future economic benefit.
Revenues
The total amount of money generated by a company from its normal business operations, before any costs or expenses are deducted.
- Learn the effects of revenues, expenses, and withdrawals on the equity held by the owner.
Verified Answer
VG
Victoria GuzmanMay 19, 2024
Final Answer :
C
Explanation :
Owner's equity is the residual interest in the assets of the entity after deducting liabilities. Since expenses are a decrease in assets or an increase in liabilities, they ultimately decrease owner's equity.
Learning Objectives
- Learn the effects of revenues, expenses, and withdrawals on the equity held by the owner.