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

question 133

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.

---

Definitions:

Fraudulent Misrepresentation

A false statement made knowingly, without belief in its truth, or recklessly, carelessly whether it is true or false, with the intent that someone else would rely on it and suffer loss.

Intentionally Misleading

Deliberately providing false or deceptive information.

Intentional Misrepresentation

is the act of knowingly providing false information with the intent to deceive or mislead another party, often resulting in legal consequences.

Rescission

The act of revoking, canceling, or annulling a contract, returning the parties to their positions prior to the contract's execution.