Zack Jones operates a sole proprietorship, selling sporting equipment. He has recently prepared financial statements for the fiscal year end of the business. Which equity accounts would you expect to see on the balance sheet?
A) Common Shares, Dividends, and Owner's Equity
B) Common Shares, Capital, and Withdrawals
C) Capital and Withdrawals, grouped or added under Owner's Equity
D) Owner's Equity and Dividends, netted together as Retained Earnings

Question

Quizplus · Accepted Answer

As a sole proprietorship, Zack Jones is the sole owner of the business and there are no shares issued. Therefore, Option A and Option B are not applicable. Option D is also not applicable as dividends are not recorded in a sole proprietorship. Instead, the equity accounts that would be seen on the balance sheet are Capital and Withdrawals, which are generally grouped or added together under Owner's Equity.

Zack Jones Operates a Sole Proprietorship, Selling Sporting Equipment