Is the director using the company bank account- use withdrawals accounting or petty cash accounts if the check is drawn for transport or entertainment etc. What are other receipts & payments mentioned above? txs
You can show expense which were withdrawn by the proprietor as a drawing , but you can't credit to drawings account because drawing means withdrawal from business by the proprietor . So Income which were received other than business can be shown as Other Income in P&L account under indirect Income subject to documentary evidence , but you can't credit to Drawings account .
So for Drawings you can pass entry as follows Drawing A/c Dr To Bank A/c Cr ( Being expense from business for personal use) Transfer to capital account Capital A/c Dr To Drawings A/C Cr ( Drawing transfer to capital account)
For Income you can pass entry Bank A/c Dr To Other Income A/c Cr ( Being other income credited to Bank) Transfer entry Other income A/c Dr To Profit and Loss A/c Cr ( Other income transfer)