What is the normal balance of the Owners Drawing account?

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Multiple Choice

What is the normal balance of the Owners Drawing account?

Explanation:
Recording withdrawals by the owner uses the drawing account, which is a contra-equity account that reduces owner's equity. In double-entry accounting, increases to drawing are recorded on the debit side, so the normal balance is a debit. When the owner withdraws cash, you debit the drawing account and credit cash. At period end, drawing is closed to capital by debiting capital and crediting drawing, further decreasing owner's equity. The drawing account isn’t an asset or a liability; it specifically trends toward a debit balance because it represents withdrawals reducing owner’s equity.

Recording withdrawals by the owner uses the drawing account, which is a contra-equity account that reduces owner's equity. In double-entry accounting, increases to drawing are recorded on the debit side, so the normal balance is a debit. When the owner withdraws cash, you debit the drawing account and credit cash. At period end, drawing is closed to capital by debiting capital and crediting drawing, further decreasing owner's equity. The drawing account isn’t an asset or a liability; it specifically trends toward a debit balance because it represents withdrawals reducing owner’s equity.

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