An amount of Rs 10,000 withdrawn by the proprietor for personal use will cause: MCQ with Answer and Explanation

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An amount of Rs 10,000 withdrawn by the proprietor for personal use will cause:

A. Decrease in Cash and Decrease in Capital

B. No change in total assets

C. Increase in Drawings and Increase in Liabilities

D. Decrease in Cash and Increase in Capital

Answer: Option A

Solution (By JKSSB Mock Tests)

Drawings reduce cash on the asset side and simultaneously reduce the proprietor's capital on the equity side.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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