Question

The amount reported in the Balance Sheet columns of the work sheet for the owner's capital represents the?

1) beginning balance
2) beginning balance plus additional investments
3) beginning balance less withdrawals
4) ending balance that should be reported on the balance sheet.

Answer 1

The Balance Sheet columns on a work sheet for owner's capital represent the ending balance of the owner's equity. This balance is computed by taking the beginning balance, adding additional investments, and subtracting any withdrawals made during the period.Answer is option d.

Step-by-step explanation:

The amount reported in the Balance Sheet columns of the work sheet for the owner's capital represents the ending balance that should be reported on the balance sheet. The ending balance takes into account the beginning balance, plus any additional investments made, minus any withdrawals. It is the net value of the owner's equity at the end of the accounting period.

To determine the ending balance, businesses often use a work sheet where the first number under Balance is the beginning balance. As per Step 10, the columns for Exports, Imports, and Balance are summed up to determine the current account balance, which includes all transactions over the period.

Analogous to a bank's balance sheet, where the net worth is the value of assets minus liabilities, in business accounting, the ending balance of the owner's capital reflects the owner's net investment after accounting for all business activities during the period.