In comparison to the owners' equity section of a corporation's balance sheet, owners' equity of a proprietorship or partnership:
a) normally does not make a distinction between invested capital and retained earnings
b) normally uses "Capital" accounts for each individual owner, rather tha a "Retained Earnings" account for all of the owners.
c) normally uses a "Drawings" account for each individual owner, rather than a "Dividends" account for all the owners.
d) all of the above
The correct answer is d) all of the above.
A sole proprietorship is an alter-ego of the company's owner. The owner usually has a single Capital account for his or her investments and earnings and a Drawings account for the ...
This solution contrasts the equity section of a corporation to that of a partnership or sole proprietorship.