If The Business Owner Withdraws Cash For Personal Use What Will Be The Effect On Capital
Paid Cash To Sole Owner / Sole Proprietor By Business For Personal Use Journal Entry And Accounting Equation When a sole proprietor or the business owners withdraw cash from the business for personal use or private use, then the Capital is decreased as withdrawing of cash from business for his own personal use creates Drawings Account which is a Contra Capital Account i.e., it is deducted from capital account. For example, Mr. X as a sole proprietor withdrew cash of Rs. 10000 from business for his own personal use, then the journal entry to record is shown below: Drawings a/c 10000 ...