Which of the following statements is not true?

a. The owner's equity is increased by amounts invested by the owner and is decreased by withdrawals by the owner.

b. The effect of every transaction is an increase or a decrease in one or more of the accounting equation elements (assets, liabilities, and owner's equity).

c. The two sides of the accounting equation are always equal.

d. All of these statements are true.

Question

Business

Elliot Stark

1 July, 23:05

Which of the following statements is not true?

a. The owner's equity is increased by amounts invested by the owner and is decreased by withdrawals by the owner.

b. The effect of every transaction is an increase or a decrease in one or more of the accounting equation elements (assets, liabilities, and owner's equity).

c. The two sides of the accounting equation are always equal.

d. All of these statements are true.

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Answers (1)

Know the Answer?

Mackenzie Richard · Answer 1

D

Explanation:

Owner's equity is your net worth, after you remove all liabilities from your assets. And it can be affected by profits and losses, investment and withdrawals. Withdrawals are subtracted from the owner's equity and thereby reduces it.

The effect of every transaction is an increase or a decrease in one or more of the accounting equation elements (assets, liabilities, and owner's equity) because the make up the balance sheet.

And in accounting, for every debit there must be a credit so the two sides of the accounting equation are always equal.

Therefore all the statements are true.