Explanation 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.

Option a: This option is incorrect because owner withdrawals decrease assets (cash) and equity…

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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Similar questions

An investment of cash by stockholders into the business willa. decrease total assets.b. increase stockholders’ equity.c. have no effect on total assets.d. decrease total liabilities.
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.
The owner's equity is computed as follows: Cash inflows less cash outflows Revenues less expenses Assets less labilities Beginning capital plus net profit
The cash payment of an account payable will have the following impact on the accounting equation. Group of answer choices Decrease an asset and decrease a liability Increase one asset and decrease another asset Increase an asset and increase a liability Decrease an asset and decrease stockholders’ equity
Which of the following decrease owner's equity or stockholder's equity? A. Paying cash to vendors. B. Paying cash to clients. C. Revenue. D. Expenses.
Which of the following transactions would result in an increase in capital employed? A. Paying a trade payable in cash B. Writing off a bad debt C. Purchasing on credit D. Repaying a loan E. Selling inventory at a profit F. Increasing the bank overdraft to purchase a non - current asset
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.
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
Assets are a.always lower than liabilities b.equal to liabilities less stockholders' equity c.the same as expenses because they are acquired with cash d.financed by the stockholders and/or creditors
Cash flow to creditors is best described as: O Cash flow to creditors is also referred to as free cash flow. The sum of cash flow to bondholders and shareholders The net difference between total assets and total liabilities. O Dividends paid out by a firm less net new equity raised. A firm's interest payments to creditors less net new borrowings.

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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.