Final answer:
When a partner withdraws from a firm, the capital account is debited and the cash account is credited. This reflects the decrease in the firm's assets and the partner's equity in the business. The correct answer is option d:Debit Capital; Credit Cash.
Step-by-step explanation:
When a partner withdraws from a firm, it's important to adjust the accounting records to reflect the change in the partnership. The correct entry to record a partner's withdrawal is Debit Capital; Credit Cash, which corresponds to option (d). This is because the partner's capital account is reduced by the withdrawal amount, representing the partner's claim on the firm's resources, and this decrease in equity is balanced by a reduction in firm's assets, specifically cash.
The capital account is a reflection of the partner’s equity in the firm and changes when contributions are made, profits or losses are distributed, or withdrawals occur. When a partner withdraws funds for personal use or upon leaving the firm, the capital account is debited to show a decrease in the owner's equity. Likewise, the cash account is credited because cash is leaving the firm’s possession, thus reducing its assets.