EQUITY 4NA PART 1

CAPITAL = ....................... contributed by owner into business for business use.

• cash

• motor vehicle

• inventory

• resources

When owner contributed into business,

• DR capital

• CR capital

Drawings = ............. taken out from business by owner for personal use.

• cash

• inventory

• resources

When owner takes out from business for own use,

• DR drawings

• CR drawings

Drawings appear in:

• statement of financial PERFORMANCE

• statement of financial POSITION

• Neither one

at END of the year, drawings account is MADE ZERO.

• True

• False

To CLOSE drawings account,

• DR drawings CR capital

• DR capital

  CR drawings

at END of the year, Profit is transferred to:

• Drawings account

• Capital account

Journal entries to transfer PROFIT to CAPITAL account

• DR profit

  CR capital

• DR capital

  CR profit

• DR income summary

  CR capital

• DR capital

  CR income summary

NOT true about capital.

• DR= -

• CR = +

• Equity

• transferred to drawings