J. Awn, the proprietor of Awn Services, withdrew $8,700 from the business during the current year. The entry to close the withdrawals account at the end of the year is:
A) Debit J. Awn, Withdrawals $8,700; credit Cash, $8,700
B) Debit J. Awn, Capital $8,700; credit J. Awn, Withdrawals $8,700
C) Debit J. Awn, Withdrawals $8,700; credit J. Awn, Capital $8,700
D) Debit J. Awn, Capital $8,700, credit Salary Expense $8,700
E) Debit Income Summary $8,700; credit J. Awn, Capital $8,700

Question

Quizplus · Accepted Answer

To close the withdrawals account, the amount withdrawn is transferred to the owner's capital account, reducing the owner's equity in the business. This is done by debiting the capital account and crediting the withdrawals account.

J Awn, the Proprietor of Awn Services, Withdrew $8,700 from the Business