Aries and Eros Start a Partnership with Capital Contributions of $37,000

question 118

Multiple Choice

Aries and Eros start a partnership with capital contributions of $37,000 and $63,000,respectively.Over the course of the year,Aries withdraws $4800 from the business in order to meet his personal expenses.Which of the following is the correct journal entry to close the relevant Withdrawals account at the end of the year?

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Aries, Withdrawals } & 4800 & \\
• \hline \text { Cash } & & 4800 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | l | }
• \hline \text { Aries, Capital } & 4800 & \\
• \hline \text { Aries, } & & \\
• \text { Withdrawals } & & 4800 \\
• \hline
• \end{array}\]
• C) No entry
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Aries, Withdrawals } & 4800 & \\
• \hline \text { Eros, Capital } & & 4800 \\
• \hline
• \end{array}\]

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Definitions:

Treasury Bills

Short-term government securities with maturities ranging from a few days to 52 weeks, issued at a discount to face value.

Inflation

A measure of the rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Efficient Capital Market

A market where all relevant information is fully and immediately reflected in securities prices, ensuring that securities are always fairly priced.

Security Prices

The market value or price at which securities, such as stocks or bonds, are bought and sold.