Detailed visual description
Alder pays an owner who also works for the company. The comparison is limited to two previously unrecorded events: current administrative wages, or a distribution approved and paid now. Ignore taxes. Compensation creates $6,000 expense, reducing income and equity by $6,000. A distribution reduces equity by $6,000 without reducing income. Both reduce Cash by $6,000. Loans, reimbursements, capitalized employee costs, and settlement of previously recorded liabilities require different analysis.
Review apparatus
Visual provenance and review
- Technique
- deterministic svg
- Role
- explanatory
- Review state
- candidate
- Rights
- CC0-1.0 · Project-authored teaching diagram
Review notes
- The comparison is restricted to two explicit alternatives, not a universal classification of every payment to an owner.