Question

Goods withdrawn by the proprietor from business is debited to the Drawings A/c.

• A. True
• B. False

Answer 1

The correct option is A True

Business entity concept of accounting says that business and the owner are treated two separate entity.

Hence anything contributed by owner considered liability for the business. On the same line, if anything (goods/cash) withdrawn by the proprietor for personal use is called as drawings.

Accounting entry will be as under:

Drawing A/c Dr.

To Purchases/Goods A/c