QQuestionAccounting
QuestionAccounting
What type of account is owner distribution?
A. liability
B. asset
C. expense
D. equity
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Answer
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Step 1I'll solve this accounting problem step by step:
Step 2: Understand the Nature of Owner Distribution
Owner distribution (also called owner draw or owner withdrawal) represents a reduction in the owner's equity in a business. When an owner takes money or assets out of the business for personal use, it decreases the owner's equity account.
Final Answer
Key Accounting Concept: Owner distributions represent withdrawals from the owner's equity account, reducing the owner's investment in the business. They are recorded on the equity side of the accounting equation and decrease the total owner's equity.
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