Question

1. If total assets increased by $175,000 during a specific period and liabilities decreased by $10,000 during the same period, the period's change in total owner's equity was a $185,000 increase.

True or False

2. Drawings are an example of an expense.

True or False

Answer 1

Question - 1.

Answer = True.

>> Total Asset = Total Liabilities + Total Equity

>> $ 175,000 = $ ( 10,000 ) + $ 185,000.

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Question - 2.

Answer : False.

>> Drawings are an amount which is used by owner for his personal use.

>> Drawing is an capital account, where drawing are deducted from capital amount.

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