A drawing account is an accounting record preserved to follow money withdrawn from a company by its owners. It is the sum of cash or value of goods withdrawn from the business by the owner for his personal use. It is deducted from the capital. A drawing account is used mainly for businesses that are taxed as sole proprietorships or partnerships.
Drawings are funds or goods taken out of a company by the owners for their private use. So, drawings can be:
- Withdrawals from your company bank account
- Transfers from your company bank account to a individual account
- A payment for a personal cost from your business’s bank account.
