Cash withdrawn by the owner of a proprietorship should be treated as an expense of the business.

Name: Cash withdrawn by the owner of a proprietorship should be treated as an expense of the business.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Cash withdrawals made by the owner of a proprietorship are not considered an expense of the business because the owner and the business are considered the same entity for accounting purposes. Instead, they are recorded as a reduction in the owner's equity in the business.

Cash Withdrawn by the Owner of a Proprietorship Should Be