What describes an increase in the owners' equity resulting from business operations?

• A. Income
• B. Drawer
• C. Air Tray
• D. Alternative Container

Answer: (A)

Income describes money earned from the business’s operations. When the business earns income, net income rises, which increases the owners’ equity through higher retained earnings. In the accounting equation, revenues boost both assets (like cash or receivables) and owner’s equity, reflecting profitability. A drawer, by contrast, reduces owners’ equity because it withdraws assets from the business. The other terms aren’t standard measures of how equity changes.