When a partner withdraws from the partnership, what is the journal entry?

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Question: When a partner withdraws from the partnership, what is the journal entry?

Options:

Correct Answer: Debit Capital Account, Credit Cash

Solution:

When a partner withdraws, the Capital Account is debited to reduce the partner\'s equity, and Cash is credited to reflect the payment.

When a partner withdraws from the partnership, what is the journal entry?

When a partner withdraws from the partnership, what is the journal entry?

Step 1: Identify the partner who is withdrawing from the partnership.
Step 2: Determine the amount that the partner will receive upon withdrawal.
Step 3: Locate the Capital Account of the withdrawing partner in the partnership's books.
Step 4: Debit the Capital Account of the withdrawing partner by the amount they will receive. This reduces their equity in the partnership.
Step 5: Credit the Cash account by the same amount. This reflects the cash payment made to the withdrawing partner.

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