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- Name – Quiz 24 – Drawings – (Answers)
- Topic – Drawings
- Answers with Explanation
Q1. Withdrawal of cash by proprietor for personal use is credited to _____.
Ans. When cash is withdrawn by the proprietor then ‘cash‘ account is credited, and ‘drawings’ account is debited.
Q2. Drawings reduces the total _____ of a business.
Ans. Drawings relate to owner’s fund and hence reduce the overall capital invested in the business.
Q3. In case of goods withdrawn for personal use, ‘stock’ account is _____.
Ans. In case of goods withdrawn for personal use ‘stock’ account is credited and ‘drawings’ account is debited.
Q4. In case of money withdrawn for personal use, ‘drawings’ account is _____.
Ans. In case of cash withdrawn for personal use from cash in-hand or bank account, drawings account is debited, and cash/bank account is credited.
Q5. Drawings account is also called _____ account.
Ans. It is also known as withdrawal account.
Q6. In case of goods withdrawn, the adjustment is done at _____.
Ans. Goods withdrawn are recorded at cost value since no profit is made on it.
Q7. At the end of an accounting year, ‘drawings’ account is _____.
Ans. Drawings account is balanced at the end of an accounting year.
Q8. Drawings are shown on the debit side of profit & loss account.
Ans. The given statement is False. It is not an expense for the business but a reduction in capital therefore it is not shown in the income statement (profit & loss account).
Q9. Drawings are shown as a liability in the balance sheet.
Ans. The given statement is False. Drawings are not shown as liability or expense instead it is usually deducted from owner’s equity (Capital).
Q10. Drawings are reduced from _____.
Ans. Drawings are owner’s withdrawal from business for own use therefore they are required to be offset against owner’s fund (capital).
Q11. Director’s Salary or Employee Wages are also Drawings.
Ans. The given statement is False. Director Salary or Employee Wages are not drawings instead they are operating expenses for a firm.
Q12. ‘Drawings’ can also mean goods _____ by business owner(s) for personal use.
Ans. Drawings may also be goods withdrawn from business for personal use by the owner(s).
Q13. ‘Drawings’ is the term given to money _____ by business owner(s) for personal use.
Ans. It is the amount withdrawn from business for personal purpose by the businessman.