The drawings account
A) appears on the income statement along with the expenses of the business.
B) must show transactions every accounting period.
C) is increased with debits and decreased with credits.
D) is not a proper subdivision of owner's equity.

Question

Quizplus · Accepted Answer

The drawings account represents the amount of money or assets withdrawn from the business by the owner for personal use. It is increased with debits because it reduces the owner's equity, and decreased with credits when the owner returns assets to the business. This account does not appear on the income statement but is a contra account to the owner's equity, properly reflecting decreases in owner's equity due to withdrawals.

The Drawings Account