To close the drawing account with a debit balance,credit the account for its balance and debit the owner's capital account.

Question

Quizplus · Accepted Answer

When closing a drawing account with a debit balance, the account should be credited for its balance to reduce it to zero. The owner's capital account should be debited for the same amount to transfer the balance back into the business. This way, the owner's equity is increased, and the drawing account is closed.

To Close the Drawing Account with a Debit Balance,credit the Account