The owner's Drawing account for the current period is closed to the
A) Cash account.
B) Income Summary account.
C) Income from Services account.
D) Wages Expense account.
E) owner's Capital account

Question

Quizplus · Accepted Answer

The owner's Drawing account is a contra equity account that reflects the withdrawals made by the owner for personal purposes. At the end of the accounting period, this account is closed to the owner's Capital account, which represents the owner's equity in the business. This transfer reduces the owner's equity in the business by the amount of the drawings. Therefore, the best choice is E) owner's Capital account.

The Owner's Drawing Account for the Current Period Is Closed