does withdrawls fall in the catergorie income statement.if not please correct. the other two choices are statement of changes in owner equity or balance sheet.
That would come under Owners Equity
Withdrawals do not fall under the category of the income statement. The income statement primarily portrays a company's revenues, expenses, and net income or loss during a specific period.
Withdrawals typically involve the owner(s) of a business taking out funds for personal use, reducing the company's assets. Such transactions are recorded in the statement of changes in owner's equity, also known as the statement of retained earnings or statement of partner's capital (depending on the business structure).
The statement of changes in owner equity depicts the changes in the owner's equity section of the balance sheet over a particular period. It demonstrates the investments made by the owner, net income, and withdrawals, ultimately indicating the remaining balance in the owner's equity account at the end of the period.
Therefore, withdrawals are recorded in the statement of changes in owner equity, not the income statement or the balance sheet.