Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

All of the following increase owner's equity except which one?

Owner investments

Net sales revenue

Net income

Owner withdrawals

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Verified step by step guidance

Understand the concept of owner's equity: Owner's equity represents the owner's claim on the assets of the business after liabilities are deducted. It is affected by various transactions and events.

Identify the factors that increase owner's equity: Owner investments, net sales revenue, and net income all contribute to increasing owner's equity. Owner investments add capital to the business, net sales revenue contributes to profitability, and net income reflects the overall earnings of the business.

Recognize the factor that decreases owner's equity: Owner withdrawals (also known as drawings) reduce owner's equity because they represent the owner taking assets out of the business for personal use.

Compare the options provided: Owner investments, net sales revenue, and net income all increase owner's equity, while owner withdrawals decrease it.

Conclude that the correct answer is 'Owner withdrawals,' as it is the only option that does not increase owner's equity.