posted Jul 2, 2009, 10:49 PM by Unknown user
[
updated Sep 2, 2009, 7:46 PM
]
- Drawing Account is an account that records the withdrawal from the business either in the form of goods, cash or assets for his private use.
- Definition of Sole Proprietor:
- Form of business with only one owner.
- Takes all the profits and bear all the losses.
- For example, an owner takes money from the business to pay for his rental, car or utilities. The withdrawals will then, be record in the Drawing Account.
- Create a new GL Code - drawingAccount (Asset)
- Initially, Issue PV (for cash) or Add JTxn (for asset):
| Debit | Drawing Account
| | Credit | Cashbook / Asset
|
- Subsequently, at the end of accounting period :
| Debit | Capital (to reduce owner's equity)
| | Credit | Drawing Account
|
|
|
