The classification and normal balance of the drawing account are a. expense, debit balance b. expense, credit balance c. liability, credit balance d. owner's equity, debit balance

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5 June, 20:25

The classification and normal balance of the drawing account are a. expense, debit balance b. expense, credit balance c. liability, credit balance d. owner's equity, debit balance

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Javon Chaney · Answer 1

The answer is D. owner's equity, debit balance

Explanation:

Drawing is the money or goods taken out from business by its owner. This act is usually common in partnership or sole proprietorship.

A drawing is not an expense, rather it is a reduction in owner's equity.

To credit owner's equity means to increase its equity and to debit owner's equity means to decrease or reduce its equity.

Since, drawing is a reduction in owner's equity, we debit owner's equity making option D. the correct answer.

Option A and B are wrong because drawings are not classified as an expense.

Option C is also wrong because a drawing is never a liability.