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Drawings account..

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(Querist)
26 June 2010 Thanks Sanjay,

But Personel ac- dr-receiver and cr-giver
Real a/c-- dr-what comes in and cr- what goes out
Drawings means something is taken away by the prpritor.. so Drawings should be the real ac ...

Please clarify..

Regards
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shakuntala chhangani

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shakuntala chhangani (Expert)
06 July 2010 Hi Gorthi, as per entity concept, business is considered as different from the proprietor/s. that is the reason why his own investment into the business is shown as a liability for business eventhough internal. Proprietor's capital A/c represents capital invt. by him into business. when capital is introduced, we pass the following entry :
Cash/ Bank/ asset A/c Dr. XX
To Capital A/c XX
The word capital represent capital invested by the proprietor (a person). Instead of writing his name, we represent him by writing capital A/c hence the rule "credit the giver " is followed when we credit capital A/c. Thus capital A/c is a representative personal A/c. the same rule is followed in case of drawings.
Regards, CA Shakuntala Chhangani
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