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Homework answers / question archive / The partner's capital account is credited in the following cases except when their is a
The partner's capital account is credited in the following cases except when their is
a. additional investment b. original investment c. share in profit d. debit balance of the drawing account at the end of the period
Answer
d .
Explanation
The correct option is D "debit balance of the drawing account at the end of the period". A journal entry to the drawing account consists of a debit to the drawing account and a credit to the cash account.
| Journal Entry: | |||
| Date | Account Titles | Debit | Credit |
| Drawing A/C | xxx | ||
| To Cash A/C | xxx | ||
A journal entry closing the drawing account of a sole proprietorship includes a debit to the owner's capital account and a credit to the drawing account.
| Journal Entry: | |||
| Date | Account Titles | Debit | Credit |
| Owners' Capital A/C | xxx | ||
| To Drawings A/C | xxx | ||
