After posting the first closing entry to the owner's capital account, the balance will be increased (decreased) by a. revenues for the period b. the net income (net loss) for the period c. owner's equity d. zero

Question

Business

Daniel Strickland

1 January, 22:26

After posting the first closing entry to the owner's capital account, the balance will be increased (decreased) by a. revenues for the period b. the net income (net loss) for the period c. owner's equity d. zero

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Grayson Mcgee · Answer 1

b. the net income (net loss) for the period

Explanation:

The owner's capital account is an account that records the proprietor's stake in the business. It shows the current value of the business assets. The owner's capital account is also called an equity account. An increase or decrease in capital or assets is recorded in the account.

If the business generates a profit, the owner's equity increases, a loss reduces owners' assets. At the end of the period, the business has to prepare an income statement showing the net gain or loss. The gain or loss will be posted on the owner's capital account.