Partners' withdrawals of assets are:
A) Credited to their retained earnings.
B) Debited to their asset accounts.
C) Credited to their withdrawals accounts.
D) Debited to their withdrawals accounts.
E) Debited to their retained earnings.

Question

Quizplus · Accepted Answer

Partners' withdrawals of assets are recorded by debiting their withdrawals accounts. This decreases their equity in the business and reflects the fact that they have taken assets out of the company for personal use. The amount debited is usually credited to the appropriate asset account (e.g. cash) to reflect the reduction in the company's assets. Therefore, option D is the correct answer.

Partners' Withdrawals of Assets Are