If the Amount of Net Income for the Current Period

question 45

Multiple Choice

If the amount of net income for the current period exceeds the amount of the owner's withdrawals, there will be a(n) :

• A)decrease in the cash account.
• B)increase in the owner's capital account.
• C)decrease in the owner's capital account.
• D)increase in the cash account.

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Definitions:

Net Advantage to Leasing

The benefit that arises from leasing an asset rather than purchasing it, considering factors like tax advantages and cash flow.

Tax Rate

The rate at which a person or business is taxed by the state on their earnings or gains.

CCA Rate

Capital Cost Allowance rate, which is the rate at which a business can claim depreciation on certain property types for tax purposes in Canada.

Straight-Line Depreciation

A system for dividing the cost of a solid asset throughout its operational life in equal yearly portions.