The payment of the owner's personal expenses from the business's chequebook should be recorded with a debit to:

Question

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When the owner's personal expenses are paid using the business's chequebook, it is considered a withdrawal of funds from the business. This withdrawal is not a business expense, but rather a distribution of profits to the owner. Therefore, it should be recorded with a debit to the owner's equity account, specifically the "Dividends" account. Choice A) Cash would be correct if the payment was made to a legitimate business expense, such as rent or supplies. Choice C) Common shares would be incorrect as it refers to the issuance of new shares, which is not related to this transaction. Choice D) Accounts Receivable would be incorrect as this account represents money owed to the business by customers and is not related to the payment of the owner's personal expenses.

The Payment of the Owner's Personal Expenses from the Business's