Fred Jones,the sole owner of a business,withdraws cash for his personal use.How does this transaction affect the accounting equation?

Question

Quizplus · Accepted Answer

When Fred Jones withdraws cash for personal use, it is recorded as a draw or withdrawal, decreasing the business's assets (cash) and simultaneously decreasing the owner's equity. This is because the money is moving out of the business to the owner personally, reducing the value of the business's assets and the owner's claim on those assets.

Fred Jones,the Sole Owner of a Business,withdraws Cash for His