Question

A business owner withdraws ₹ 20,000 in cash for personal use. Which account will be affected?

Options

• Drawings Account (Dr), Cash Account (Cr).

• Cash Account (Dr), Drawings Account (Cr).

• Capital Account (Dr), Drawings Account (Cr).

• Expense Account (Dr), Cash Account (Cr).

Answer 1

Drawings Account (Dr), Cash Account (Cr).

Explanation:

When the owner withdraws cash for personal use, it reduces business capital.

Hence, Drawings A/c is debited (increase in drawings) and Cash A/c is credited (cash goes out).