What is the journal entry to close the drawing account?

• A. Debiting the cash account and crediting the drawing account
• B. Debiting revenue and crediting the drawing account
• C. Debiting the owner's capital account and crediting the drawing account
• D. Debiting the drawing account and crediting the owner's capital account

Answer: (C)

Drawings reduce the owner’s equity, so at the end of the period you transfer that balance to the owner’s capital account to reset the drawing to zero. Since the drawing account normally has a debit balance, the closing entry is to debit the owner’s capital and credit the drawing account. This directly reduces the owner’s equity by the amount withdrawn and clears the drawing for the period.

For example, if drawings total 3,000, you would record: Debit Owner’s Capital 3,000; Credit Drawing 3,000. This leaves the drawing account with a zero balance and reduces the owner’s capital by the same amount.

Other options don’t fit because they either involve cash (not part of closing drawings), touch revenue (drawings are not revenue), or debit the drawing and credit the capital (that would increase the drawing balance and decrease capital, which does not close the drawing).