The Statement of Owner's Equity begins with the beginning balance followed by
A) plus Net Income (loss) less withdrawals
B) plus Net Income (loss) plus investments
C) plus investments less withdrawals
D) plus investments plus Net Income (loss) less withdrawals

Question

Quizplus · Accepted Answer

The Statement of Owner's Equity shows the changes in the owner's equity during an accounting period. The beginning balance is added to any investments made by the owner during the accounting period, and then the net income (or loss) is added to the total. Finally, any withdrawals made by the owner are subtracted from the total to arrive at the ending balance. Therefore, Choice D (plus investments plus Net Income (loss) less withdrawals) best describes the order of the Statement of Owner's Equity.

The Statement of Owner's Equity Begins with the Beginning Balance