If a company reported a loss in the first month of operations, the loss would reduce owner's capital and would be
A) added in the same section as owner's investments.
B) deducted in the same section as owner's investments.
C) deducted in the same section as owner's drawings.
D) added in the same section as owner's drawings.

Question

Quizplus · Accepted Answer

A loss reduces owner's capital, so it is deducted in the same section as owner's drawings.

If a Company Reported a Loss in the First Month