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Question
Select the most appropriate alternative from those given below and rewrite the statement.
The drawings of partners are transferred to __________________ account.
Options
trading
profit and loss
partner’s capital
balance sheet
Solution
The drawings of partners are transferred to partner’s capital account.
Explanation: Drawings are the amount withdrawn by the partners from the business for their personal use. Such withdrawals from the business cause a decline in partners’ capital. Therefore, these are recorded on the debit side of Partner’s Capital Account.
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