To decrease the balance of the owner's capital account, you would?

To decrease the balance of the owner's capital account, you would?

• A. Credit the account
• B. Debit the account
• C. Increase the account
• D. Decrease the account

Answer: (B)

Owner's capital is part of owner's equity and normally has a credit balance. In double-entry accounting, debits reduce balances and credits increase them. So to decrease the balance of the owner’s capital, you record a debit to that account. This also aligns with situations like the owner taking drawings or the business incurring expenses that reduce equity. Crediting the account would increase it, and increasing the account would also raise its balance, not lower it.

Owner's capital is part of owner's equity and normally has a credit balance. In double-entry accounting, debits reduce balances and credits increase them. So to decrease the balance of the owner’s capital, you record a debit to that account. This also aligns with situations like the owner taking drawings or the business incurring expenses that reduce equity. Crediting the account would increase it, and increasing the account would also raise its balance, not lower it.