What is the journal entry for a partner withdrawing cash from the partnership?
Practice Questions
1 question
Q1
What is the journal entry for a partner withdrawing cash from the partnership?
Debit Cash, Credit Capital Account
Debit Drawings Account, Credit Cash
Debit Capital Account, Credit Drawings Account
Debit Cash, Credit Drawings Account
The correct entry is to debit the Drawings Account and credit Cash to record the withdrawal.
Questions & Step-by-step Solutions
1 item
Q
Q: What is the journal entry for a partner withdrawing cash from the partnership?
Solution: The correct entry is to debit the Drawings Account and credit Cash to record the withdrawal.
Steps: 5
Step 1: Identify the partner who is withdrawing cash from the partnership.
Step 2: Determine the amount of cash that the partner is withdrawing.
Step 3: Open the Drawings Account for the partner if it is not already created.
Step 4: Record the withdrawal by debiting the Drawings Account with the amount withdrawn. This shows that the partner's equity in the partnership is decreasing.
Step 5: Credit the Cash account with the same amount. This shows that cash is leaving the partnership.
