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WAEC Financial Accounting 1994 Question 3

Question 3

Double Entry and the Ledger

Where a proprietor withdraws cash from bank for office use, the entries would be

  1. A.credit Cash Account, debit Bank Account
  2. B.debit Cash Account, credit Bank Account
  3. C.debit Office Account, credit Bank Account
  4. D.debit Drawings Account, credit Bank Account
  5. E.debit Bank Account, credit Drawings Account.
Show the answer and explanation

Answer: B (debit Cash Account, credit Bank Account)

Explanation

Cash comes in (debit cash) and the bank balance goes down (credit bank); it is for the office, so not drawings.