- 1 Marks
Question
When a proprietor of a business withdraws cash from the organization for private use, the proper postings are:
| DR | CR |
|---|---|
| A. Cash account | Drawings account |
| B. Drawings account | Capital account |
| C. Bank account | Drawings account |
| D. Drawings account | Cash account |
| E. Bank account | Cash account |
Answer
Answer:
D. Drawings account | Cash account
Explanation:
When a proprietor withdraws cash for personal use, the cash account decreases, so a credit entry is made. The corresponding debit entry goes to the drawings account, reflecting the reduction in the proprietor’s equity.
- Tags: Cash Withdrawal, Drawings, Posting, Private Use
- Level: Level 1
- Uploader: Kwame Aikins