Question

8. Withdrawal of cash from business by the proprietor should be credited to

a) Drawings A/c

b) Cash A/c

c) Capital A/c

d) Purchases A/c​

Answer 1

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➲ Withdrawal of cash from business by the proprietor should be credited to .

a) Drawings A/C

b) Cash A/C ✔︎

c) Capital A/C

d) Purchases A/C

➥ Withdrawal of cash from business by the proprietor should be credited to Cash A/C .

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➣ WHAT IS DRAWINGS ?

➪ Amount of cash or value of goods withdrawn by the owner from the business for personal use or for any private/personal purpose is called "Drawings".

➣ WHAT IS DRAWINGS ACCOUNT ?

➪ The proprietor of a business may withdraw some amount of money or take goods from the business for his personal/private/domestic use. Withdrawals by the owner or proprietor of the business for his personal use is recorded in a separate books of account. It is known as "Drawing Account".

➣ ACCOUNTING ENTRY :

➪ In case of withdrawals by the proprietor for his personal use, the accounts to be debited/credited are as under :

▪︎ Withdrawals by the proprietor : ↦ Drawings A/C - Dr.

• If Drawings is in Cash :↦ Cash A/C - Cr. (Decrease in Asset)

• If Drawings is by Cheque :↦ Bank A/C - Cr. (Decrease in Asset)

• If Drawings is in Goods :↦ Purchase A/C - Cr. (Decrease in Asset)

Answer 2

Answer:

b) Cash A/C

Explanation: