A sole proprietor makes a cash withdrawal from his company. How doesthis transaction affect the accounting equation?a. Assets, liabilities, and equity remain the same.b. Assets decrease; equity decreases.c. Assets increase; liabilities decrease.d. Assets decrease; equity increases.

The correct answer is:b. Assets decrease; equity decreases. Explanation:When a sole proprietor…

Answered: A sole proprietor makes a cash…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter1: Asset, Liability, Owner’s Equity, Revenue, And Expense Accounts

Section: Chapter Questions

Problem 5DQ: What is the effect on the fundamental accounting equation if supplies are purchased on account? How...

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A sole proprietor makes a cash withdrawal from his company. How does this transaction affect the accounting equation? a. Assets, liabilities, and equity remain the same. b. Assets decrease; equity decreases. c. Assets increase; liabilities decrease. d. Assets decrease; equity increases.