When the Owner of a Sole Proprietorship Withdraws Assets from the Business

question 236

Multiple Choice

When the owner of a sole proprietorship withdraws assets from the business for personal use

• A) it is treated like a noncash dividend.
• B) it is illegal because the assets belong to the separate entity, the proprietorship.
• C) it would be recorded as a loss by the proprietorship.
• D) it is recorded as a reduction of owner's equity.

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Definitions:

Metabolic Pathways

Networks of chemical reactions within cells that convert substances into other products, crucial for maintaining life's processes.

Photosynthesis

The process by which green plants, algae, and some bacteria transform light energy into chemical energy, converting carbon dioxide and water into glucose and releasing oxygen as a byproduct.

Cellular Respiration

The process by which cells convert glucose and oxygen into energy, carbon dioxide, and water.

Heat

A form of energy associated with the movement of atoms and molecules, transferable between objects or systems resulting in temperature changes.