The Statement of Owner's Equity is calculated as follows:
A) beginning capital + net income - withdrawals + additional investments = ending capital
B) beginning capital + net loss + withdrawals + additional investments = ending capital
C) beginning capital + net loss - withdrawals + additional investments = ending capital
D) beginning capital + net income + withdrawals + additional investments = ending capital

Question

Quizplus · Accepted Answer

The Statement of Owner's Equity shows changes in the owner's capital account over a specific period of time. It is calculated by adding the beginning capital to the net income, and then subtracting any withdrawals made by the owner during the period. Finally, any additional investments made by the owner are added to arrive at the ending capital for the period. Choice A is the correct formula for calculating the Statement of Owner's Equity.

The Statement of Owner's Equity Is Calculated as Follows