Income tax paid is debited to ______________.

Trading account

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Profit and Loss Account

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Drawing Account

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Cash Account

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Solution

The correct option is C Drawing Account
If any amount is withdrawn by the owner for personal use, that is considered as drawing and debited to drawing account. Drawing amount will be deducted from the capital account.

Income Tax paid is a personal expense of the owner, hence this has to be debited to drawings account.

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