1. What is the purpose of the owner capital account in the closing process? a. O

ID: 2552351 • Letter: 1

Question

1. What is the purpose of the owner capital account in the closing process?

a. Owner capital is where the period's net income or loss is transferred.

b. Owner capital is a clearing account used to zero out all real accounts.

c. Owner capital is used to verify that net income or loss is reported correctly.

d. Owner capital is used as a temporary account.

2. The journal entry to record an owner withdrawal of funds for personal use includes a

a. credit to the owner's drawing account.

b. credit to the owner's capital account.

c. debit to the owner's capital account.

d. debit to the owner's drawing account.

1) Owner's capital account used in closing process as net income of loss of current period should be transferred.

so answer is a) Owner capital is where the period's net income or loss is transferred.

2) Owner's withdrawal journal entry is Owner's drawing debit and credit cash or any other assets

so answer is d) debit to the owner's drawing account.

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