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Is Drawings an Expense?

James H. Sterling • • 6 min read
Is Drawings an Expense?
★ Key Takeaways

The Drawing Account Is Not an Expense - Rather, It Represents a Reduction of Owners' Equity in the Business. the Drawing Account Is Intended to Track Distributions to Owners in a Single Year, After Which It Is Closed out (With a Credit) and the Balance Is Transferred to the Owners' Equity Account (With a Debit).

Take a look at key findings about Is Drawings an Expense.

Direct Answer • Key Takeaway

The Drawing Account Is Not an Expense - Rather, It Represents a Reduction of Owners' Equity in the Business. the Drawing Account Is Intended to Track Distributions to Owners in a Single Year, After Which It Is Closed out (With a Credit) and the Balance Is Transferred to the Owners' Equity Account (With a Debit).

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James H. Sterling
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James H. Sterling

James Sterling reports on renewable energy developments, climate policy, ecological conservation, and green tech innovations around the globe.