Which of the following entries records the withdrawal of cash for personal use by D. Bill, the owner of a business?
A) Debit Cash and credit D. Bill, Drawing
B) Debit Cash and credit Salary Expense
C) Debit Salary Expense and credit Cash
D) Debit D. Bill, Drawing and credit Cash
E) None of these

Question

Quizplus · Accepted Answer

When the owner of a business withdraws cash for personal use, the transaction is recorded by debiting the account D. Bill, Drawing (or Owner's Drawing if that is the account name) and crediting Cash. This transaction is necessary to keep the business's cash balance accurate and to distinguish between business and personal transactions. Option A is almost correct but does not specify that the withdrawal is for personal use. Option B is incorrect because it implies that the withdrawal is an expense, which it is not. Option C is also incorrect because it implies that the withdrawal is related to salary, which it is not. Option E is incorrect because there has to be some entry made to account for the withdrawal.

Which of the Following Entries Records the Withdrawal of Cash