Laura Chu withdraws $1,000 cash from her company, One Note Music, for personal use. Recording this transaction will include a credit to Cash and a debit of $1,000 to

Question

Quizplus · Accepted Answer

Since the transaction involves the owner (Laura Chu) withdrawing cash from the business for personal use, it is considered an owner's withdrawal or "draw". Therefore, the debit is to the account Owner's Drawings. The credit is to Cash because cash is being taken out of the business. Option A (Drawings Expense) is incorrect because drawings are not an expense. Option B (Owner's Capital) is not accurate because the transaction does not involve contributing capital into the business. Option D (Salaries and Wages Expense) is not applicable in this scenario because it is not related to the transaction.

Laura Chu Withdraws $1,000 Cash from Her Company, One Note