Partners' withdrawals of assets are:
A) Credited to their withdrawals accounts.
B) Debited to their withdrawals accounts.
C) Credited to their retained earnings.
D) Debited to their retained earnings.
E) Debited to their asset accounts.

Question

Quizplus · Accepted Answer

When a partner withdraws assets from the business, it is considered a distribution of their equity in the partnership. Therefore, the withdrawal is debited to their withdrawals account to reduce their equity in the partnership. This does not affect retained earnings or asset accounts.

Partners' Withdrawals of Assets Are