The Capital account debited and the withdrawals credited would be the result of
A) closing the Income Summary account-there is a net income.
B) closing the withdrawal account.
C) closing the Income Summary account-there is a net loss.
D) closing the expense accounts.

Question

Quizplus · Accepted Answer

When the withdrawals account is closed, the balance is credited to the capital account. This indicates that the owner has taken money out of the business and the capital account is reduced by the amount withdrawn. The other options do not involve the withdrawals account.

The Capital Account Debited and the Withdrawals Credited Would Be