Drawings - What are Drawings?
Definition: Money or assets taken out of the company by the owners for personal use.
Drawings by the owner of the company will need to be recorded in the balance sheet as a reduction in the assets and a reduction in the owners equity as an accounting record needs to be maintained to track money withdrawn from the business by its owners. An account is set up in the balance sheet to record the transactions taken place of money removed from the company by the owners.
These are not to be confused with expenses or wages for the owners as these will be recorded in the company profit and loss account separately.