Purchase of a motor bike for the son of the proprietor will:

D. Decrease assets and decrease capital

answer is (( D)) 

( D ) is the correct answer

D

D

Answer is D. His asset will decrease, and also capital will decrease.

C: Decrease asset and decrease liability.

• This item must be treated in Book as personal drawings of the proprietor. Business cannot change the capital as and when the proprietor withdraws money for his personal use. Here the liability of the business towards the proprietor is reduced to the extent of money withdrawn - (sure it must be part of projected profit), not capital.

C

D

Its D; Decrease asset (Cash/Bank) & Decrease Capital (Charge as Owner's Drawing)

D