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Write a note on the drawing |
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Answer» The money or goods withdrawn by owner for personal use is calles Drawing. An account is set up in the balance sheet to record the transactions taken place of money removed from the company by the owners. This is known as the \'drawing\xa0account\'. In the\xa0drawing\xa0account, the amount withdrawn by the owner is recorded as a debit. If goods are withdrawn, the amount recorded is at cost value. Drawings: The money or goods or both withdrawn by owner from business for personal use, is known as drawings.\xa0Example:\xa0Purchase of car for wife by withdrawing money from business.A drawing account is an accounting record maintained to track money withdrawn from a business by its owners. A drawing account is used primarily for businesses that are taxed as sole proprietorships or partnerships. Owner withdrawals from businesses that are taxed as separate entities must generally be accounted for as either compensation or dividends. |
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