Final answer:
The statement is true; as the Owner Withdrawals account increases with debit, it reflects a decrease in the business's overall equity.
Step-by-step explanation:
When an owner withdraws money from the business, the Owner Withdrawals account increases with a debit, and this results in an overall decrease in equity. Therefore, the correct answer to this statement is A. True.
In accounting, withdrawals by the owner (drawings) are recorded in a separate account under owner's equity which reduces the total equity of the business. This is because when an owner takes money out of the business, it is no longer available to use within the company, effectively reducing the company's assets and therefore its equity.