Both assets and owner's equity (i.e. capital) would be increased by ___________.

Proprietor's withdrawals

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Sale of good on credit

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Purchasing a machinery on credit

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Retained earnings

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Solution

The correct option is D Retained earnings
When Owner is retaining earnings , it will increase owners equity along with the cash or bank balance.
Hence, option D is correct.

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Similar questions

Q. Both assets and owners' equity would be increased by _________.

Q. Which of the following, equations properly represents a derivation of the fundamental accounting equation?
(a) Assets + Liabilities = Owner Equity
(b) Asset = Owner Equity
(c) Cash = Assets
(d) Assets - Liabilities = Owner Equity

Q. If owners equity of a business is

R s . 70, 000

and liabilities are of

R s . 40, 000

total assets of the business will be ___________.

Fill in the missing figures :
$\begin{matrix} Date & Particulars & L.F. & Debit & Credit (Rs) & (Rs) Sundry Assets A/c & Dr. & . . . . . . . . . . . . To Vendor A/c & . . . . . . . . . . . (Being business is taken over by X Ltd) - ----------------------------------------- - Vendor A/c & Dr. & . . . . . . . . . . . . To Equity Share Capital A/c & . . . . . . . . . . . . To Securities Premium Reserve A/c & . . . . . . . . . . . . (Being purhase consideration on Rs 2,00,000 is settled by issuing equity shares of Rs 10 each at a premium of 25 %) \end{matrix}$

Q. The liabilities of a firm are Rs. 3,000; the capital of the proprietor is Rs. 7,000. The total assets are __________.

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Both assets and owner's equity (i.e. capital) would be increased by ___________.

The correct option is D Retained earningsWhen Owner is retaining earnings , it will increase owners equity along with the cash or bank balance. Hence, option D is correct.

The correct option is D Retained earnings
When Owner is retaining earnings , it will increase owners equity along with the cash or bank balance.
Hence, option D is correct.