Problem 1.7 Financial Accounting WHAT IS THE EFFECT ON EQUITY WHEN A BUSINESS OWNER WITHDRAWS CASH FORPERSONAL USE?A) EQUITY INCREASESB) EQUITY DECREASESC) NO EFFECT ON EQUITYD) ASSETS INCREASE.

Explanation of Equity:Equity, also known as owner's equity or net worth, represents the owner's…

Answered: WHAT IS THE EFFECT ON EQUITY WHEN A…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 5MCQ

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Explanation
What effect will the cash payment of an account payable have on the Balance Sheet? Group of answer choices Decrease an asset and decrease stockholders’ equity Decrease an asset and decrease a liability Increase an asset and increase a liability Increase one asset and decrease another asset
Which of the following type of transaction will NOT cause a business cash inflow?A. decrease in assets other than cash.B. increase in liabilities.C. decrease in liabilities.D. increase in owner’s equity.
What happens when an owner withdraws cash for personal use? Onothing, because the cash is not for business use O owner's equity increases O owner's equity decreases O liabilities increase
What types of transactions reduce owners equity? What types of transactions reduce retained earnings? What do they have in common?
Which of the following represents a source of cash in the investing section? A. sale of investments B. depreciation expense C. decrease in accounts receivable D. decrease in bonds payable
Exchanges of assets for assets have what effect on equity? A. increase equity B. may have no impact on equity C. decrease equity D. There is no relationship between assets and equity.
True or False? cash flows to and from creditors and owners include changes in equity and debt
If the cost of borrowing is lower than the operating return .. business by increasing borrowing in its capital structure a. no change in the return on equity b. Increase the return on equity c. Reduction in the return on equity d. Change in the return on equity in an indefinite manner e. none
Which of the following is a cash inflow? a. an increase in dividend payment b. a decrease in accrued liabilities c. a decrease in accounts receivable d. a decrease in accounts payable
Which one of the following will decrease the cash flow from assets, all else equal? Select one: O a. increase in cash flow to stockholders Ob. increase in cash flow to creditors Oc. increase in operating cash fiow O d. increase in net capital spendin O e. decrease in the change in net working capital Clear my choice
What increases the Assets & Equity? A. Fresh Capital B. Debts paid off C. Revenues D. None of the above

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WHAT IS THE EFFECT ON EQUITY WHEN A BUSINESS OWNER WITHDRAWS CASH FOR PERSONAL USE? A) EQUITY INCREASES B) EQUITY DECREASES C) NO EFFECT ON EQUITY D) ASSETS INCREASE.