Laura Chu Withdraws $1,000 Cash from Her Company, One Note

question 216

Multiple Choice

Laura Chu withdraws $1,000 cash from her company, One Note Music, for personal use. Recording this transaction will include a credit to Cash and a debit of $1,000 to

• A) Drawings Expense.
• B) Owner's Capital.
• C) Owner's Drawings.
• D) Salaries and Wages Expense.

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Definitions:

Liability

A financial obligation or debt that a company owes to others, which must be settled over time through the transfer of assets or services.

Asset

An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.

Expense

Money spent or cost incurred in an entity's efforts to generate revenue, representing the cost of doing business.

Trial Balance

An accounting report that lists the balances of all general ledger accounts at a particular point in time to check the accuracy of bookkeeping entries.