Which One of the Following Items Decreases Owner's Equity

question 108

Multiple Choice

Which one of the following items decreases owner's equity?

• A) Revenues
• B) Investments by owners
• C) Drawings
• D) Purchase of equipment

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Definitions:

Operating Cash Flow

The cash generated from a company's normal business operations, indicating whether a company can maintain or grow its operations.

Required Rate

The minimum annual percentage return that an investment must earn to be considered acceptable to an investor, also known as the required rate of return.

Marginal Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify, essentially the rate at which the last dollar of income is taxed.

Depreciation

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.