Drawings : Asset or Liability. (1 Viewer)

[dat202hoe]

I have no idea what drawings are.

 

[Rampager]

Owner's Equity, It's the money taken by the owner's out of the business for themselves.

It is indicated on the balance sheet in brackets, e.g. (10000), meaning -10000.

 

[anuj89]

i think drawings is neither an asset nor a liability, its a personal account. treatment of it is as:
receiver is debit so drawings is debited.

 

[MaNiElla]

nope, sorry.

 

[swathard]

It is neither an asset or a liability. It is owner's equity. Drawings refer to money taken out of the business by the owner. Increasing it is a debit account, decreasing it is a credit account.

Hope that helps! A bit late though, lol. I've only just started the TAFE Accounting Course this year.

 

[cazate07]

Owners Equity refers to what the business owes the owners.

Drawings are a method for an owner to take back some of the owners equity that it has invested in the bsuiness.

Theirfore when using in an accounting framework we refer to Drawings as a negative figure which in accounting is shown by placing in backets eg - 10 is shown as (10)

So on the Balance sheet drawings will be shown in the owners equity section as the owner taking back money form the business.

Hope this helps

egs

Owners Equity

Retain Profits ----------------- profit from the previous year
Net Profit ---------------------- as per above same thing as retain profit
Capital-------------------------- initial investment
Drawings ( )----------------- Money being withdrawn from the owner