Which accounts are affected when the owner withdraws cash from the business?
A)Assets and Withdrawals
B)Liabilities and Capital
C)Assets and Liabilities
D)None of the above are correct.

Question

Quizplus · Accepted Answer

When the owner withdraws cash from the business, the assets account and withdrawals account are affected. The cash account (which is an asset) is decreased, and the withdrawals account (which is a sub-account of owner's equity) is increased. This reflects that the owner has taken money out of the business for personal use. Hence, option A is the correct answer.

Which Accounts Are Affected When the Owner Withdraws Cash from the Business