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Question
A Either (B) or (C). B By transfer to Capital A/c credit side. D By transfer to Current A/c credit side.
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Solution
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The drawing account is a temporary owner equity account, it must be closed at the end of each accounting year. The account is also a contra account to the owner’s equity, so the drawing account’s debit balance is contrary to the expected balance of an owner equity account. The drawing account is closed directly to the capital or current account. A
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