Which of the Following Entries Records the Withdrawal of Cash

question 85

Multiple Choice

Which of the following entries records the withdrawal of cash for personal use by D. Bill, the owner of a business?

• A) Debit Cash and credit D. Bill, Drawing
• B) Debit Cash and credit Salary Expense
• C) Debit Salary Expense and credit Cash
• D) Debit D. Bill, Drawing and credit Cash
• E) None of these

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Definitions:

Perpetual preferred share

A type of preferred stock that has no fixed maturity date, often providing dividends indefinitely.

Compounded semi-annually

The method of computing interest by taking into account both the original amount of money deposited or lent and the interest that has been earned on that amount from past periods, with the calculation occurring semi-annually.

Perpetuity

A financial instrument that provides endless payments of a fixed amount of money, often used to model the value of stable companies.

Semi-annually

Occurring twice a year, or every six months.