What is the result if the amount of net income for the year is less than the amount of the owner's withdrawals?
A)Owner,Capital increases
B)Cash balance decreases
C)Cash balance increases
D)Owner,Capital decreases

Question

Quizplus · Accepted Answer

If the amount of net income for the year is less than the amount of the owner's withdrawals, it indicates that the business has incurred a loss. As a result, the owner's withdrawals will exceed the net income, meaning the business has fewer funds available to distribute to the owner. This results in a decrease in the owner's capital. Additionally, if the owner had to dip into the cash balance to cover the excess withdrawals, it would result in a decrease in the cash balance as well.

What Is the Result If the Amount of Net Income