How do u show Drawings In Trading Account ?
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Answer / donatus mugisha r.
Drawings could be of any form. There are drawings composed
of cash amounts taken away from a business by the
proprietor for personal use; there are drawings that could
be composed of goods(amounts of inventory) that was
initially bought in (purchased) for resale - referred to as
purchases. Drawings could also taken a form of a non-
current asset taken from a business for personal use. A
business owner can take these drawings in form of things
like a computer, a chair or even a car and transform its
initial use (in the business) into a new personal use.
Generally a drawing involves a proprietor of a business
taking something belonging to a business (his or her
business) and transform it into personal property for
personal use.
Accounting entry for drawings is as shown below
A. When it is a cash drawing
Dr. Drawings A/c
Cr. Cash A/c (To recognize the reduction in cash)
B. When it is drawing of an inventory
Dr. Drawings A/c
Cr. Trading A/C (deducted from purchases figure in the
trading account)
C. When it is of an asset
When the drawings are in
Dr. Drawings A/c
Cr. Asset A/c (To recognize the reduction in the asset
value)
The drawings account will be dealt with in the statement of
financial position to reduce the size of sharecapital.
| Is This Answer Correct ? | 27 Yes | 3 No |
Answer / mussa mayala
drawings is divided into 2 categories;1.Drawings of goods
for personal use,2.Drawings of cash for personal or office
use.In trading account drawings will reduce the amount of
goods bought for resale that is Purchases, so drawings
should be deducted from purchases to get the real goods
available for sale.
| Is This Answer Correct ? | 18 Yes | 0 No |
drawings is a personal account.
so u can,t show drawings in trading a/c.
but have a some condition that if propriter or partner
taken goods from firms than u it will show.
| Is This Answer Correct ? | 14 Yes | 7 No |
Answer / laxman
Drawings are reduced from the purchases or shown the credit
side of the trading account because some of the goods used
by the owner of the business for his personal so we have
reduce the drawings from purcheses to know actual profit of
the business
| Is This Answer Correct ? | 10 Yes | 3 No |
Answer / abdi osman
Drawings can either be in form of cash or goods(inventory).
If it's cash,drawings are debited and cash credited with the amount involved.(decrease in asset)...Whereas in case of goods,purchases are credited in place of cash...(also decrease in asset:inventory)...Drawings remain the same:debit entry)
| Is This Answer Correct ? | 0 Yes | 0 No |
Answer / hemant
Drawing is reduced from purchase account in trading account
| Is This Answer Correct ? | 10 Yes | 12 No |
Answer / satyaki_raju@yahoo.com
Dear Anil I think you dont know what is Profit and Loss a/c
and what is Balance Sheet.
| Is This Answer Correct ? | 5 Yes | 7 No |
Answer / anil
Drawings is personal accounts.So it is show in trading
accounts
| Is This Answer Correct ? | 3 Yes | 16 No |
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