What is Drawings In Accounting - Definition - Meaning - Explanation - Example
It is the amou nt of C ash or Goods (Purchases, Stock) taken away by the Sole Proprietor (Sole Owner) from the business for his own personal use. Such Cash was invested or Goods supplied by the Sole Proprietor but now he wants to use these A ssets for his personal use. Examples are Cash Taken by the Sole Owner for Home Use, Business Car Used for his own purpose, etc. Treatment of Drawings In Final Accounts / Fi nancial Statements Or Where Do Drawings Go In The Balance Sheet Drawi ng is considered as a C ontra Capital Account as it is deducted from Capital of the business in case of Sole Proprietorship. So, it is the reversal or opposite of capital account. The Accounting Treatment of Drawings is that, it is deducted from Closing Balance of Capital on Balance Sheet . The Formula for the calculation of Drawings i...