In Preparing Closing Entries, The Owner's Drawings Account Will Be Debited - Closing Journal Entry For Owner's Drawings Account

To Close Drawings Account, We Debited It Or Credited?

No, in preparing Closing Entries, the Owner’s Drawings Account will be credited instead of debited as the normal, positive or usual balance of drawings account is debited which is opposite to Owner’s Equity Account, i.e., it is a Contra Capital Account, so it deducted from capital account on balance sheet.

So, to close drawings account, we credited it and debit Capital Account in order to transfer it to owner's capital account as show below:

Drawings Closing Entry / The Journal Entry To Close Drawings Account

                                                                                Capital a/c  XXX

 

                                                                                                            Drawings a/c  XXX

 

                                                               (Drawings Account Transferred To Capital Account)