Question

Name the three items/entries that comprise owners equity.

a.

b.

c.

What does "Cash is King" mean to executives

Answer 1

1) The components of owner's equity include:

-- Owner's contribution

-- Owner's drawings

-- Retained earnings

2) The cash is king, queen, and duke for the executives. It is considered to be the most valuable compared to any other form of investment tool because cash indicates that company has enough cash on hand to cover short-term operations, purchasing assets such as equipment and machinery or acquire other facilities. It is significant for the vital to the health of a company. Furthermore the studies observes that companies that use only cash generally spend less money and in addition has to pay less in interest fees.