When a proprietor withdraws cash from the business for private use, he?

Assessment: JAMB UTME - Principles of Accounts - 1999 Subject: Financial Accounting

Question 1 Report

When a proprietor withdraws cash from the business for private use, he?
Answer Details
When a proprietor withdraws cash from the business for private use, he debits drawings account and credits cash account. This is because the owner is taking out money from the business, which is his personal use, hence the account to record this is called drawings account. The cash account is credited because the amount of cash available with the business decreases when the owner takes out cash for personal use.
Read lesson note on Nature And Significance Of Accounting (JAMB)
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