All of the Following Are True Regarding Owners' Equity Except

question 11

Multiple Choice

All of the following are true regarding Owners' Equity except:

• A)Owners' Equity accounts represent the net worth of a business,and are only increased by an investment in the business.
• B)Owners' Equity accounts are decreased by net losses and dividends (for corporations).
• C)Owners' Equity accounts are increased by owners' investments in the business and net profits retained in the business rather than paid out in dividends.
• D)Owners' Equity is calculated by Assets = Liabilities + Owners' Equity.

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Definitions:

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, ending with net income or loss.

Operating Financing

Refers to the process of planning and managing the day-to-day financial operations of a company, including sourcing and utilizing funds.

Investing Activities

Financial activities related to the acquisition or disposal of long-term assets and investments not included in cash equivalents.

Statement of Cash Flows

An accounting report detailing the impact of variations in balance sheet accounts and earnings on cash and cash equivalents, categorizing the analysis among operating, investing, and financing activities.