Owner's capital at the end of the period is equal to
A) owner's capital at the beginning of the period plus net income minus liabilities.
B) owner's capital at the beginning of the period plus net income minus drawings.
C) net income.
D) assets plus liabilities.

Question

Quizplus · Accepted Answer

Owner's capital at the end of the period is equal to the owner's capital at the beginning of the period, plus net income for the period, minus any drawings made by the owner during the period. Therefore, option B is correct. Option A includes the subtraction of liabilities, which is not necessary in calculating the owner's capital at the end of the period. Option C is incorrect because net income alone does not represent the owner's capital at the end of the period, as it must also consider the beginning capital and drawings made. Option D is also incorrect because it includes both assets and liabilities, which are not necessary in calculating the owner's capital at the end of the period.

Owner's Capital at the End of the Period Is Equal