What is the result if the amount of profit for the year is less than the amount of the drawings?
A)The amount in the Cash account decreases.
B)The amount in the Cash account increases.
C)The Capital account decreases.
D)The Capital account increases.

Question

Quizplus · Accepted Answer

If the profit is less than the drawings, it means that more money is being taken out of the business than is being earned, leading to a decrease in the Capital account.

What Is the Result If the Amount of Profit for the Year