Multiple choice

The entry to record payment of cash to the owner as a withdrawal of equity is

  1. debit Cash, credit Drawing

  2. debit Drawing, credit Cash

  3. debit Cash, credit Accounts Payable

  4. none of these

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A withdrawal by the owner decreases equity. This is recorded by debiting the Drawing account (which reduces equity) and crediting Cash (which reduces an asset).