Home › CA Foundation › accounting › Final Accounts of Sole Proprietors › Drawings of ₹15,000 by proprietor are:
Drawings of ₹15,000 by proprietor are:
ADebited to P&L Account
BDeducted from capital
CTreated as expense item
DShown as a liability
Answer & Solution
Correct answer: B. Deducted from capital
1. Drawings are personal withdrawals by the proprietor.
2. They reduce capital, not P&L.
3. Closing capital = Opening + Profit − Drawings.
_Source: ICAI BoS Foundation Paper 1, Ch 7 U1 "Final Accounts", §1.5 capital section_
Related questions
Goods worth ₹8,000 destroyed by fire; ₹6,000 recovered from insurance. The loss debited toTrial balance: capital ₹2,00,000; drawings ₹15,000; net profit for year ₹35,000. Closing cBills receivable shown as ₹20,000 in trial balance; ₹5,000 discounted but not yet matured Interest on capital is treated as:Goods costing ₹10,000 used by proprietor personally:Closing stock includes goods sent on consignment ₹15,000 (sold not yet). They should be:Manager's commission is 10% of net profit after such commission. Net profit before commissBad debts ₹5,000; provision for doubtful debts opening ₹3,000; required closing provision