Which decreases owner's capital?

Question

Quizplus · Accepted Answer

Drawings are withdrawals of cash or other assets by the owner(s) for personal use or other purposes unrelated to the business. Since these withdrawals reduce the amount of resources available to the business, they decrease the owner's capital.

Note: B is incorrect because owner's investments represent additional contributions of assets or cash by the owner(s), which increase the owner's capital. C is incorrect because revenues are income generated by the business, which increases the owner's capital. D is incorrect because cash receipts can represent revenue or collection of accounts receivable, both of which increase the owner's capital.

Which Decreases Owner's Capital