Is Drawing A Permanent Or A Temporary Account

Drawing Account Is A Temporary Account Or A Permanent Account In Accounting

Drawing Account is a Temporary Account as well as a Personal Account as it is closed to Owner’s Equity Account as it is relaed with the owner of the business.

Eventhough, the drawing account is considered as a personal account (Contra Capital Account) and a temporary account yet it is not considered as a nominal account as it is not an expense and not a permanent account as it is closed to owner’s equity account.

Drawing account is created by owners in case of Sole Proprietorship or Partnership Business.

The normal balance / positive or favorable balance of drawing account is debit which is against the normal credit balance of owner’s equity account. That is why, it is deducted from owner’s equity account. Also, it is a contra capital account.