When the Withdrawals account is closed:
A) Owner's Capital will be debited.
B) Income Summary will be debited.
C) Income Summary will be credited.
D) Revenue will be debited.

Question

Quizplus · Accepted Answer

The Withdrawals account represents amounts taken out of the business by the owner. At the end of the accounting period, the balance in the Withdrawals account is closed to the Owner's Capital account by debiting Owner's Capital and crediting Withdrawals, to decrease the Owner's Capital for the amount withdrawn.

When the Withdrawals Account Is Closed