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A withdrawal of cash from business by the proprietor should be credited to:
- a)Drawing account
- b)Capital account
- c)Cash account
- d)Purchase account
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
A withdrawal of cash from business by the proprietor should be credite...
Withdrawal of Cash from Business by Proprietor
When a proprietor withdraws cash from the business, it is considered as his personal expense and reduces the amount of cash available in the business. The transaction needs to be recorded to ensure proper accounting of the business transactions.
Account to be Credited
The cash account needs to be credited when the proprietor withdraws cash from the business. This is because cash is being reduced from the business and the cash account needs to be reduced accordingly.
Option C - Cash Account
The correct option is 'C' which states that the withdrawal of cash from the business by the proprietor should be credited to the cash account. This is because cash is being reduced from the business and the cash account needs to be reduced accordingly.
Importance of Recording Transactions
Recording transactions is important for maintaining accurate financial records of the business. It helps in monitoring the financial health of the business and making informed decisions. It also helps in preparing financial statements and tax returns.
Conclusion
In conclusion, when a proprietor withdraws cash from the business, it needs to be recorded by crediting the cash account. This ensures proper accounting of the transaction and helps in maintaining accurate financial records of the business.
When a proprietor withdraws cash from the business, it is considered as his personal expense and reduces the amount of cash available in the business. The transaction needs to be recorded to ensure proper accounting of the business transactions.
Account to be Credited
The cash account needs to be credited when the proprietor withdraws cash from the business. This is because cash is being reduced from the business and the cash account needs to be reduced accordingly.
Option C - Cash Account
The correct option is 'C' which states that the withdrawal of cash from the business by the proprietor should be credited to the cash account. This is because cash is being reduced from the business and the cash account needs to be reduced accordingly.
Importance of Recording Transactions
Recording transactions is important for maintaining accurate financial records of the business. It helps in monitoring the financial health of the business and making informed decisions. It also helps in preparing financial statements and tax returns.
Conclusion
In conclusion, when a proprietor withdraws cash from the business, it needs to be recorded by crediting the cash account. This ensures proper accounting of the transaction and helps in maintaining accurate financial records of the business.
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A withdrawal of cash from business by the proprietor should be credite...
Withdrawal of cash by proprietor should be debited to drawing account in the books of the business. Same amount should be credited by the proprietor in cash account.
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A withdrawal of cash from business by the proprietor should be credited to:a)Drawing accountb)Capital accountc)Cash accountd)Purchase accountCorrect answer is option 'C'. Can you explain this answer?
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