4.8 Recording Drawings
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VCE Accounting Unit 3. Video of this presentation can be found on my YouTube channel here https://www.youtube.com/channel/UCf5jyuJoYwie8tWfvjEc0zg.
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4.8 Recording Drawings
- 2. Video of this presentation at… YouTube Channel for VCE Accounting
- 3. © Michael Allison. Author’s permission required for external use. How do you classify Drawings – withdrawals of cash or other assets (e.g. stock) by the owner? They are a part of Owner’s Equity but have the opposite effect to normal entries into an equity ledger account Hence, Drawings are classified as a Negative Owner’s Equity account – it requires an entry opposite to that which occurs when an owner puts capital into the business 4.8 RECORDING DRAWINGS Debit Credit Owner’s Equity Negative OE Debit Credit Owner’s Equity Negative OE Debit Credit Owner’s Equity Negative OE
- 4. © Michael Allison. Author’s permission required for external use. Debit Credit Assets Expenses Liabilities Owner’s Equity Revenue Negative OE 4.8 RECORDING DRAWINGS
- 5. © Michael Allison. Author’s permission required for external use. 4.8 RECORDING DRAWINGS Transaction Account Classification Increase / Decrease Debit Credit The owner withdrew $700 cash for personal use Drawings -OE 700 Cash A 700 Debit Credit Assets Expenses Liabilities Owner’s Equity Revenue Negative OE Transaction Account Classification Increase / Decrease Debit Credit The owner withdrew $700 cash for personal use Drawings -OE 700 Cash A 700 Transaction Account Classification Increase / Decrease Debit Credit The owner withdrew $700 cash for personal use Drawings -OE 700 Cash A 700 Transaction Account Classification Increase / Decrease Debit Credit The owner withdrew $700 cash for personal use Drawings -OE 700 Cash A 700 Transaction Account Classification Increase / Decrease Debit Credit The owner withdrew $700 cash for personal use Drawings -OE 700 Cash A 700 Transaction Account Classification Increase / Decrease Debit Credit The owner withdrew $700 cash for personal use Drawings -OE 700 Cash A 700 Transaction Account Classification Increase / Decrease Debit Credit The owner withdrew $700 cash for personal use Drawings -OE 700 Cash A 700 Transaction Account Classification Increase / Decrease Debit Credit The owner withdrew $700 cash for personal use Drawings -OE 700 Cash A 700 Transaction Account Classification Increase / Decrease Debit Credit The owner withdrew $700 cash for personal use Drawings -OE 700 Cash A 700 Debit Credit Assets Expenses Liabilities Owner’s Equity Revenue Negative OE Debit Credit Assets Expenses Liabilities Owner’s Equity Revenue Negative OE Debit Credit Assets Expenses Liabilities Owner’s Equity Revenue Negative OE
- 6. © Michael Allison. Author’s permission required for external use. TASK In-class Homework Ex4.4 (part c) X SQ13 X Ex4.5 X Ex4.6 X Ex4.7 X