If beginning capital was $100,000, ending capital is $85,000, and the owner's withdrawals were $10,000, the amount of net income or net loss was
A) net income of $5,000.
B) net income of $15,000.
C) net loss of $15,000.
D) net loss of $5,000.

Question

Quizplus · Accepted Answer

The net loss is calculated by considering the decrease in capital and the owner's withdrawals. The capital decreased from $100,000 to $85,000, a $15,000 decrease. However, since the owner withdrew $10,000, the actual decrease in business value due to operations is $5,000, indicating a net loss of $5,000.

If Beginning Capital Was $100,000, Ending Capital Is $85,000, and the Owner's