A business transaction is recorded in the books of account when the?

Accounts - Principles of Accounts

JAMB 1998

A. owner of the business invests his N10,000 in another company
B. business retains part of ofits profits for future expansion purposes
C. business invest applies for overdraft facilities from its bankers
D. owner of the business collects N5,000 from the accountant

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Correct Answer: Option D

Explanation

When the owner of the business withdraws money from the business for personal use, it is called ''drawings'' and must be recorded for future reference.

Any type of drawings reduces the capital or owner's equity of a business, so it is important to keep track of these drawings and manage them within your accounts. However, drawings are not considered a business expense.

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