Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 21 - No. 35)
In the context of drawing cash, what is the effect on the owner's equity?
Increases owner's equity.
Decreases owner's equity.
Has no impact on owner's equity.
Increases retained earnings.
Explanation
Drawings reduce the owner's equity, as it is a withdrawal of funds from the business.
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