A withdrawal of cash from business by the proprietor should be debited to _________________.

Drawing Account

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Capital Account

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Cash Account

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Purchase Account

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Solution

The correct option is B Drawing Account
The transaction is based on the separate entity concept which signifies that business and its proprietor are treated two separate legal entity. Withdrawal of cash by proprietor should be debited to drawing account in the books of the business. Same amount should be credited by the proprietor in cash account.

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Withdrawals of cash by a proprietor for personal use shall be debited to ___.

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