Question

Select the most appropriate alternative from those given below and rewrite the statement.

The withdrawals of partner from the business for their personal use is called as……………..
a) capital
b) profit
c) drawings
d) cash

Answer 1

The withdrawals of partners from the business for their personal use are called drawings.

Explanation: Drawings refer to the amount withdrawn in cash or kind by any or all of the partners for their personal use. In case of fixed capital method, it is recorded in the Partners’ Current Account, while in case of fluctuating capital method, it is recorded in the Partners’ Capital Accounts.