Similarities & Differences Between Drawings And Assets In Accounting

Drawings And Assets

Drawings is the withdrawal of Cash or Goods by the Proprietor from his business. In case of a company or corporation’s business, there is the withdrawal of Earnings in the form of Dividend which shows the distribution of profits to the shareholders / stockholders while Assets are the resources owned and controlled by the owners of the business from which the business may expect probable future economic benefits.

Drawings is a Contra Capital Account as it is the reversal of capital account while assets are Permanent Accounts which may be used in the business for short-term or long-term basis depending upon the Types of Assets.

Similarities Between Drawings And Assets In Accounting

Both are reported in the financial statements.

Both have normal, usual, positive or favorable balance on debit side of the ledger and unusual, negative or unfavorable balance on credit side.