BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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capital
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withdrawals
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equities
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revenue
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Detailed explanation-1: -The amount which the owner withdraw from business for personal use is called as drawings.
Detailed explanation-2: -Paid cash to owner for personal use Assets taken out of a business for the owner’s personal use are called withdrawals. A withdrawal decreases O.E. The withdrawal decreases the account balance of the withdrawn asset, such as Cash.
Detailed explanation-3: -The drawing account represents a reduction of the business’ assets, as the assets in question are withdrawn and transferred to the owner for personal use.
Detailed explanation-4: -Answer and Explanation: The owner of the business is allowed to withdraw assets from a business because, as the rightful owner, they have the power to distribute dividends in kind (i.e. distribution of physical assets).
Detailed explanation-5: -Cash withdrawal: In the most common type of withdrawal, a business owner transfers money from the company’s assets to their private account.