Hi can you please tell me how I enter owner's drawings. At present I am placing sales income other than that which goes into the cheque account into money to be banked. I am then taking the owners drawings from the money to be banked account.
In doing this it is showing a minus balance in the owners drawings account.
Definitely doing something wrong here. Can you please assist me.
Many thanks
Doug
Hi Doug,
Don't be alarmed - your accounting treatment of drawings is fine. It is normal for the Owners Drawings account balance to be negative. Equity accounts represent 'money you have put into the business', so a negative balance represents 'money you have taken out of the business'.
Cheers,
