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How would you close the Partner’s Drawings Account?
  • a)
    By transfer to Capital or Current Account debit side.
  • b)
    By transfer to Capital Account credit side.
  • c)
    By transfer to Current Account credit side.
  • d)
     Either ‘b’ or ‘c’.
Correct answer is option 'A'. Can you explain this answer?
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How would you close the Partner’s Drawings Account?a)By transfer...
However, in general terms, closing a partnership involves establishing a clear agreement between both parties, setting clear goals and objectives, and defining roles and responsibilities. It is also essential to establish a communication plan and a system for tracking progress and resolving conflicts. Finally, it is important to maintain a positive relationship with the partner and to regularly evaluate the partnership to ensure that it is meeting its intended goals.
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How would you close the Partner’s Drawings Account?a)By transfer...
The drawing or withdrawal account is a temporary owner equity account, requiring it to be closed at the end of the accounting year. The drawing account is also a contra account to owner's equity, because the drawing account's debit balance is contrary to the normal, expected balance for an owner equity account.
Also note that the drawing account is closed directly to the capital account. The drawing account is not an expense and as a result it does not get closed to the Income Summary account.
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How would you close the Partner’s Drawings Account?a)By transfer to Capital or Current Account debit side.b)By transfer to Capital Account credit side.c)By transfer to Current Account credit side.d)Either ‘b’ or ‘c’.Correct answer is option 'A'. Can you explain this answer?
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