EX 1-11 Effect of transactions on owner’s equity

Indicate whether each of the following types of transactions will either (a) increase owner’s equity or (b) decrease owner’s equity:

1. expenses

2. owner’s investments

3. owner’s withdrawals

4. revenues

Answers:

1. (b)  decrease

2. (a)  increase

3. (b)  decrease

4. (a)  increase