Decreases in equity are caused by:
A) Purchases of assets and payment of liabilities.
B) Purchases of assets and incurrence of liabilities.
C) Payment of liabilities and unprofitable operations.
D) Distributions of assets to the owner and unprofitable operations.

Question

Quizplus · Accepted Answer

Decreases in equity occur when assets are distributed to owners (such as dividends) and when the company experiences unprofitable operations, leading to losses.

Decreases in Equity Are Caused By