Question:

Which are the two transactions that increase Owner’s ?

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There are four transactions that affect Owner’s equity. Which are the two transactions that increase Owner’s equity?

a. Revenues and Owner’s investments

b. Owner’s Investments and Expenses

c. Expenses and owner’s withdrawals

d. Revenues and expenses

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2 ANSWERS


  1. I don't particularly care for how this is worded. Of the choices I guess I'd say (a) because an owner investment increases equity and revenues eventually get closed out to equity. However if expenses exceed revenues the equity will decrease


  2. i don't see any way in which expenses can increase owners' equity, so it's got to be A.

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