3. Preparation of Financial Statements

Capital And Drawings — Quiz

Test your understanding of capital and drawings with 5 practice questions.

Practice Questions

Question 1

What is the effect of drawings on the owner's equity?

Question 2

If a business has an opening capital of $$ \$25,000 $, makes additional investments of $ \$7,000 $, and has drawings of $ \$4,000 $$ during the year, what is the capital before considering profit or loss?

Question 3

Which of the following accounts is debited when an owner withdraws cash for personal use?

Question 4

How is the owner's equity calculated at the end of the accounting period?

Question 5

Which financial statement shows the changes in owner's equity over a period?