Question

What happens to a business's accounts when an owner withdraws cash for personal use?

The cash account is debited, and sales is credited
the cash account is credited, and drawing is debited
the cash account is credited and capital is debited
the cash account is debited, and capital is credited

Answer 1

the cash account is credited, and drawing is debited

Step-by-step explanation:

If a business owner withdraws some money from the firm, the cash available for a business will decrease. The cash account is credited (reduced ) by the amount withdrawn.

The drawing account is the contra entry account used to reduce the value of the owner's equity in the balance sheet. An increase in the drawing account implies more capital will be deducted from the balance sheet. A reduction in the cash account corresponds will an increase in the drawings account. The drawing account will be debited (increased) with the cash amount withdrawn.