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Drawings

What are drawings?

Drawings are money or goods the owner takes out of the business.

They reduce capital.

Drawings are not an expense. They never appear in the statement of profit or loss.

Example

The owner of a bike shop takes £500.00 from the business bank account for their own use. Drawings is debited with £500.00 and Bank is credited with £500.00.

Why it matters

A sole trader does not pay themself a wage. What they take out is drawings, and it does not change the profit.

Practise it

  1. 1Capital, profit and drawings10 min, hardFree
  2. 2Keep business and personal money apart8 min, easyFree
  3. Drawings are not wages8 min, easyPremium
Practise it nowCapital, profit and drawings

Ledger Drill is practice, not tax or accounting advice. If this looks wrong, tell us at [email protected].