Journal Entry For Withdrew Cash For Private Expenses

Cash Withdrew From Business For Private Expenses / Personal Use

There may be, from time to time, the owners need to withdraws cash from business for their own personal use or private expenses. Such withdrawal is called Drawings in accounting.

The entry to record for cash (e.g. Rs. 80000) withdrew from business for private expenses is shown below:

                                                                          Drawings a/c  80000

 

                                                                                                   Cash a/c  80000

 

                                                       (Cash Withdrew From Business For Private Use)

This type of transaction is treated as separate from business matters. So, we deduct the amount of drawings account from capital account.

So, we can say that cash withdrew by sole proprietor, business owners or partners from business for any private or personal expenses are treated as separate from business matters, according to Separate Legal Entity Concept. So, we create drawings account for such private expenses account and credit cash account as it is going out of the business.