Fred Jones,the Sole Owner of a Business,withdraws Cash for His

question 239

Multiple Choice

Fred Jones,the sole owner of a business,withdraws cash for his personal use.How does this transaction affect the accounting equation?

• A) The assets, liabilities, and equity remain the same.
• B) The assets decrease and equity decreases.
• C) The assets increase and liabilities decrease.
• D) The assets decrease and equity increases.

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Definitions:

Claims On Real Assets

Financial securities or other types of financial instruments that confer ownership or a right to a portion of the value of tangible assets.

Well-Developed Economy

A country's economic state characterized by strong industrial, service, and financial sectors, stable political systems, high standards of living, and advanced technological infrastructure.

Investment Assets

Tangible or intangible items that individuals, companies, or funds buy or invest in with the expectation of generating future income or profit.

Derivative Assets

Financial instruments whose value is derived from the performance of an underlying asset, index, or interest rate.