Question

A withdrawal by the owner Group of answer choices:

a) increases assets, increases equity
b) decrease assets, decrease liabilities
c) increases assets, increases liabilities
d) decreases assets, decreases equity

Answer 1

A withdrawal by the owner will decrease assets and decrease equity in the company's financial statements.

Step-by-step explanation:

The question asks about the effect of a withdrawal by the owner on a company's financial statements. When an owner withdraws cash or other assets from the company, this is known as a draw or owner's withdrawal. This action decreases assets because cash or assets are leaving the company's possession. Correspondingly, it decreases equity because the owner's equity in the company is reduced by the amount withdrawn. A withdrawal does not typically affect liabilities unless the withdrawal is specifically to pay off a liability.

In summary, the correct answer is (d) decreases assets, decreases equity.