What Is the Result If the Amount of Net Income

question 96

Multiple Choice

What is the result if the amount of Net Income for the year is less than the amount of the Owner's Withdrawals?

• A)Owner's Name, Capital increases
• B)Cash balance decreases
• C)Cash balance increases
• D)Owner's Name, Capital decreases

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Definitions:

Resale Proceeds

The amount of money received from selling an asset that was previously purchased.

Price-Earnings Ratio

A valuation measure comparing the current share price of a company to its per-share earnings, used to evaluate if a stock is over or undervalued.

Retained Earnings

The portion of a company's profits that is kept or retained and not paid out as dividends to shareholders.

Selling Bonds

The act of offering bonds to investors as a way to raise funds; bonds are debt securities under which the issuer owes the holders a debt.