Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 12 - No. 4)
What is the purpose of the "drawings" account in a partnership?
To record the partner's initial investment.
To track the partner's share of profits and losses.
To record the partner's withdrawals of cash or assets.
To calculate the partnership's net income.
Explanation
The drawings account tracks partners' withdrawals for personal use, reducing their capital.
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