Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 10 - No. 27)
What is the impact on the financial statements when the owner of a sole trader business takes cash out of the business for personal use?
Increases profit and increases assets.
Decreases profit and increases assets.
Decreases owner's equity and decreases assets.
Increases owner's equity and increases assets.
Explanation
Drawings by the owner reduce both equity and the assets.
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