Accounting for IGCSE & O level - Final Statements (Section 7 - No. 6)
What is the impact of a net loss on the owner's equity section of the balance sheet?
Increases the owner's equity
Decreases the owner's equity
Has no effect on owner's equity
Increases the company's liabilities.
Explanation
Net loss is subtracted from the owner's capital, thus decreasing the owner's equity.