A. Tell Me the TruthDirections: Read each sentence carefully and determine whether the statement is TRUE or FA LSE.1. The equity section of the statement of financial position of a sole proprietorshipbusiness shows more than one equity component.2. Mr. D's equity at the beginning of the period has a balance of P50. During theperiod Ms. D earns a profit of P20 and makes total drawings of P5. The net changein Ms. D's equity during the period is an increase of P20.3. Mr. C's equity at the end of the period has a balance of Pl15. During the peri odMr. C earns profit of P20 and makes total drawings of P5. Mr. C's equity at thebeginring of the period is P100.4. Mr. B's equity at the beginning of the period has a balance of P20. During theperiod Mr. B incurs loss of P2 and makes total drawings of P5. Mr. B's equity atthe end of the period is P13.5. Mr. A's equity at the beginning of the period has a balance of P100. During theperiod Mr. A earns profit of P20 ad makes total drawings of P5. Mr. A's equityat the end of the period is P125.

The equity section represents the investment and withdrawals made by the owners of the business.

Answered: A. Tell Me the Truth Directions: Read…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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