BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

Solutions

Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

An increase to which of these accounts will increase owner’s equity?

(a) Accounts Payable

(b) Drawing

(c) Client Fees

(d) Rent Expense

To determine

State the option that will increase owners’ equity.

Explanation

Owners’ equity: The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Thus, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders.

Justification for the incorrect answer:

Option (a):

Accounts payable is a liability and an increase in the accounts payable will increase the liability account. Therefore it is an incorrect option.

Option (b):

Drawings are a component of owners’ equity and an increase in the drawings account decreases the owner’s equity account (Owners’ capital). Therefore it is an incorrect option...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are information processing activities?

Accounting Information Systems

Why is productivity important?

Essentials of Economics (MindTap Course List)

TIME FOR A LUMP SUM TO DOUBLE If you deposit money today in an account that pays 6.5% annual interest how long ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)