If the owner takes cash out of the business for personal use, the withdrawal should be recorded as an expense of the business.

Name: If the owner takes cash out of the business for personal use, the withdrawal should be recorded as an expense of the business.
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Question

Quizplus · Accepted Answer

Withdrawing cash from the business for personal use is not an expense of the business, it is a reduction of the owner's equity in the business. It should be recorded as a withdrawal or a draw in the owner's equity account, not as an expense.

If the Owner Takes Cash Out of the Business for Personal