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What two accounts are affected when a business pays cash to the owner for personal use?
Owners Drawing account, which is owners equity and is debited.
Cash, which is an asset and thats credited.
What else can I help you with?
What accounts are affected if you withdrew cash from the business for personal use?
If the withdrawer is not the owner of the business, it would be classed as a loan.If the owner of the business was withdrawing the money, it is classed as drawings.
What is the journal entry when the owner withdraws money from the business account for personal use?
debit drawingscredit cashDebit - Accounts Receivable - Owner Credit - Cash
Is it legal to transfer funds from business to personal account?
It is legal as long as both accounts belong to the same person/company. If the owner of a company transfers cash from his business account to his business account it is legal. But, if his Personal Assistant does it from her boss's business account to her personal account, it is illegal.
An account used to record the owner's investments in the business is called?
capital accounts
What is drawings in accounting?
it's the cash removed by the owner of the business from the account of the business for his personal usee
What accounts are affected if you withdrew cash from the business for personal use?
If the withdrawer is not the owner of the business, it would be classed as a loan.If the owner of the business was withdrawing the money, it is classed as drawings.
When an accounts payable account is paid in cash the owner's equity in the business decreases True or False?
False. Payment of an accounts payable reduces cash and reduces accounts payable. Equity is not affected.
What is the journal entry when the owner withdraws money from the business account for personal use?
debit drawingscredit cashDebit - Accounts Receivable - Owner Credit - Cash
Is it legal to transfer funds from business to personal account?
It is legal as long as both accounts belong to the same person/company. If the owner of a company transfers cash from his business account to his business account it is legal. But, if his Personal Assistant does it from her boss's business account to her personal account, it is illegal.
Can a business owner pay personal expenses from the business?
dr.drawings cr.cash
When the owner invests cash in a business?
When the owner withdrawals cash for personal use,
An account used to record the owner's investments in the business is called?
capital accounts
What is the business entity convention?
Business entity convention The convention that holds that, for accounting purposes, the business and its owner(s) are treated as quite separate and distinct. The business entity concept provides that the accounting for a business or organization be kept separate from the personal affairs of its owner, or from any other business or organization. This means that the owner of a business should not place any personal assets on the business balance sheet. The balance sheet of the business must reflect the financial position of the business alone. Also, when transactions of the business are recorded, any personal expenditures of the owner are charged to the owner and are not allowed to affect the operating results of the business. Business entity convention The convention that holds that, for accounting purposes, the business and its owner(s) are treated as quite separate and distinct. The business entity concept provides that the accounting for a business or organization be kept separate from the personal affairs of its owner, or from any other business or organization. This means that the owner of a business should not place any personal assets on the business balance sheet. The balance sheet of the business must reflect the financial position of the business alone. Also, when transactions of the business are recorded, any personal expenditures of the owner are charged to the owner and are not allowed to affect the operating results of the business.
How are credit accounts affected when another company buys them out?
When often another company buys a credit card company, they have purchased your account. Most often, it is business as usual, and payments are directed to the new owner of the account.
What is drawings in accounting?
it's the cash removed by the owner of the business from the account of the business for his personal usee
What can an owner encourage debtors to pay their accounts on time?
the business should offer discounts to its customers
Can owner of a company be held personally liable?
The owner can be held personally liable for business debts, but it depends on the business structure and what type of contract the owner holds. If the owner is operating a sole proprietorship (he/she is the only owner), the owner and the business are technically considered the same entity, meaning the owner has full personal liability for any business debt. In a partnership, the business belongs to each partner, meaning that business debt also belongs to each partner personally. Each partner is liable for 100% of business debts. The only time an owner is not held personally liable for debts is in a corporation or LLC. In both of these cases, the business and owner are considered separate entities and, in theory, the owner could have no personal liability for business debt. Liability could occur if the owner has signed a personal guarantee, has offered his/her property as collateral, has signed a contract in his/her own name, he/she uses personal loans or credit cards to fund the business, or there is some sort of fraud or sloppy record-keeping.
