do income result in decrease in equity?
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do income result in decrease in equity?
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Answer:
However, net income is only one factor that can affect owner's equity in a company. Owner's equity can also increase if the owner of a business invests more money into the business. Similarly, it can decrease if the owner takes money out of the business.
Explanation:
Net income contributes to a company's assets and can therefore affect the book value, or owner's equity. ... On the flip side, if a company generates a profit but its costs of doing business exceed that profit, then the owner's equity generally decreases.