Drawings by owner of business are generally recorded on which of the following side of a cash book?
Correct answer: A. Payments
- A. Payments
- B. Receipts
- C. Incomes
- D. Expenditures
Explanation
Drawings made in cash reduce the business's cash balance, so they are entered on the payments side of the cash book. Drawings are withdrawals by the owner, not a business expense.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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