The journal entry to record the withdrawal of cash by Sue Snow, the owner, to pay a personal utility bill would include a debit to __________ and a credit to __________.
Debit and credit
To determine the journal entry to record the withdrawal of cash by Sue Snow, the owner, to pay a personal utility bill, we need to consider the rules of double-entry bookkeeping.
In double-entry bookkeeping, every transaction must be recorded with both a debit and a credit entry to ensure that the accounting equation (Assets = Liabilities + Equity) stays in balance.
In this case, we are recording the withdrawal of cash by Sue Snow, which means that an asset, specifically the Cash account, will be reduced. To decrease the Cash account, we make a debit entry.
At the same time, we need to record the reduction in Sue Snow's ownership stake in the company. Since the owner withdrawing cash for personal use decreases the equity in the business, we need to credit the Owner's Equity account.
Therefore, the journal entry to record the withdrawal of cash by Sue Snow to pay a personal utility bill would include a debit to the Cash account and a credit to the Owner's Equity account.