QuestionMay 5, 2026

21. When an owner makes a withdrawal, what happens to owner's equity?it Owner's equity increases Owner's equity decreases Owner's equity becomes an expense Owner's equity has no change

21. When an owner makes a withdrawal, what happens to owner's equity?it Owner's equity increases Owner's equity decreases Owner's equity becomes an expense Owner's equity has no change
21. When an owner makes a withdrawal, what happens to owner's equity?it
Owner's equity increases
Owner's equity decreases
Owner's equity becomes an expense
Owner's equity has no change

Solution
4.6(270 votes)

Answer

Owner's equity decreases Explanation 1. Identify the effect of withdrawals Withdrawals reduce the owner's capital invested in the business. 2. Relate to owner's equity Owner's equity is the owner's net claim; reducing capital directly decreases owner's equity.

Explanation

1. Identify the effect of withdrawals <br /> Withdrawals reduce the owner's capital invested in the business. <br />2. Relate to owner's equity <br /> Owner's equity is the owner's net claim; reducing capital directly decreases owner's equity.
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