All of the following are true regarding Owners' Equity except:
A)Owners' Equity accounts represent the net worth of a business,and are only increased by an investment in the business.
B)Owners' Equity accounts are decreased by net losses and dividends (for corporations).
C)Owners' Equity accounts are increased by owners' investments in the business and net profits retained in the business rather than paid out in dividends.
D)Owners' Equity is calculated by Assets = Liabilities + Owners' Equity.

Question

Quizplus · Accepted Answer

Owners' Equity accounts can be increased not only by an investment in the business but also by net profits retained in the business. Therefore, the statement that they are only increased by an investment in the business is incorrect.

All of the Following Are True Regarding Owners' Equity Except