Drawings is to be __________to closing capital.
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As Drawing refers to withdrawal of capital, Due to drawings, closing capital is decreased resulting a reduced Profit.
Hence, to ascertain correct profit Drawings are added back to closing capital.
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The correct fill in the blank is added.
- Drawings are typically added to the closing capital of a business.
- They are generally added when compiling a Statement of Profit and Loss in a single entry system.
- This is done so because if they had not been withdrawn, the proprietor's capital would have been larger, resulting in a more considerable profit made during the year.
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