What do withdrawals refer to in a business context?

Withdrawals in a business context specifically refer to the assets or funds that an owner takes out of the business for personal use. This action decreases the total equity of the business because it reduces the amount of resources that the company has on hand to operate or invest back into the business. Such withdrawals can be in the form of cash, inventory, or other types of assets, and they are typically recorded in the company's accounting system to reflect the reduction in owner's equity.

In contrast, depositing funds into a business account represents an inflow of capital, which is the opposite of a withdrawal. Outstanding checks are liabilities still pending payment, and income from sales pertains to revenue generated by the business, which also does not relate to withdrawals. Thus, the nature of withdrawals is specifically tied to the owner's draw from the business, making that option the correct answer.