An owner withdrawal of $20,000 would: A. decrease owner’s equity and increase assets by $20,000. B. increase owner’s equity and decrease liabilities by $20,000. C. increase liabilities and assets by $20,000.

C) increase liabilities and assets by $20,000.

Explanation:

Any financial transaction affects both assets and liability equally. If asset is increased, liability also is increased and vice-versa.

In the given problem, Option A and option B states that while one increases, other decreases. which is not possible.

So option C is correct.