01-09-2005, 11:24 PM
AOA SHAHID FSS
Yes exactly, Azeem's post is good enough for describing the drawing a/c. in a limited company. But if u mean to know about the Drawing in a Sole Trading business that would be as follows
"Basically drawing a/c is the reduction of capital(as was said by Contra Capital).Its the amount(or might be merchandise which are used in business) where the Proprietor uses it personelly during the course of a business in anticipation of PROFIT"
SUPPOSE
Owner, Capital is 100,000 (opening balance)
ADD PROFIT 50,000
lessdrawing(20,000)
profit increases 30,000 then add back to opening balance of capital.(ie. 130,000 closing balance of capital. What i mean to say is that capital was reduced by 20,000)
Although, Shareholders of a company are not allowed to withdraw any thing in anticipation of profits. Hence this term is solely used for the Sole proprietorship (or Partnership).
Hope, ur problem will be solved.
REGARDS
ASIF ALI
Yes exactly, Azeem's post is good enough for describing the drawing a/c. in a limited company. But if u mean to know about the Drawing in a Sole Trading business that would be as follows
"Basically drawing a/c is the reduction of capital(as was said by Contra Capital).Its the amount(or might be merchandise which are used in business) where the Proprietor uses it personelly during the course of a business in anticipation of PROFIT"
SUPPOSE
Owner, Capital is 100,000 (opening balance)
ADD PROFIT 50,000
lessdrawing(20,000)
profit increases 30,000 then add back to opening balance of capital.(ie. 130,000 closing balance of capital. What i mean to say is that capital was reduced by 20,000)
Although, Shareholders of a company are not allowed to withdraw any thing in anticipation of profits. Hence this term is solely used for the Sole proprietorship (or Partnership).
Hope, ur problem will be solved.
REGARDS
ASIF ALI
