The Drawing account is best described as which type of account?

Prepare for the Cengage Accounting Exam 1. Use flashcards and tackle multiple choice questions with hints and detailed explanations. Be exam-ready!

Multiple Choice

The Drawing account is best described as which type of account?

Explanation:
Drawing represents withdrawals by the owner for personal use, which reduces the owner’s stake in the business. It does not reflect an asset, an expense, or revenue, so it isn’t classified with those categories. Because it decreases owner’s equity and is closed to the capital account at period end, it is best described as an equity account.

Drawing represents withdrawals by the owner for personal use, which reduces the owner’s stake in the business. It does not reflect an asset, an expense, or revenue, so it isn’t classified with those categories. Because it decreases owner’s equity and is closed to the capital account at period end, it is best described as an equity account.

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