The Book-keepers Forum (BKF)
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Drawings or Capital
Post Info TOPIC: Drawings or Capital
closecontrol


Member

Status: Offline
Posts: 5
Date:
Drawings or Capital
Permalink  

Hi All

I seem to get different answers from Accountants regarding the posting of Owners drawings on Sage (Sole Traders), what does anyone think as regards posting them to 7001 (gross wages), or 3001 (Capital introduced).

Thanking you for your help!

Jane - Close Control

__________________
Jane Close
rowets


Veteran Member

Status: Offline
Posts: 43
Date:
Permalink  

Hi Jane,

Definitely not post to any of the wages expense accounts, drawings are not a business expense, they do not get posted to the Profit & Loss account, they are a Balance Sheet item.  I usuall create a Drawings nominal account in the 3000's Capital and Reserves group of nominals.  When you post owners drawings, you will be crediting the bank (or cash) account and debiting the drawings account.

The Capital Introduced account is a credit account, a liability to the business, it is money owed by the business to the owner.  The Drawings account is the opposite, it is money that the owner is taking back out of the business.  The two need to be kept separate from each other and appear as separate items in the bottom half of the balance sheet.

Tim
 

__________________
Tim Rowe
TSR Accountancy & Bookkeeping Services
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Drawings or Capital
Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  
©2007-2024 The Book-keepers Forum (BKF). All Rights Reserved. The Book-keepers Forum (BKF) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Book-keepers Forum and BKF are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Book-keepers Forum. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Book-keepers Forum. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to: bookcertltd@gmail.com.

Privacy & Cookie Policy  About