Meaning of term drawing in accounting

3641 views 4 replies

Amit

Accountant

261 Points Posted on 04 July 2011

Originally posted by : Amit
	There is another question also relating to personal book keeping as below. If I purchase for my house, say a T.V, should I show it in assets side in balance sheet or should I show it as an expense ? What is the correct way to accouunt and what is the normal practice? Thanks in advance.

It will be treated as drawing...

However, if purchased for office, the same will be shown as Fixed Assets....

Thanks Dear Arvind. Now I know how to account but a new question has arisen., I could not understand the term "drawing" in the above answer. If someone can please explain in simple language, it will be helpful.

Replies (4)

U S Sharma

glidor@gmail.com

21068 Points Posted on 04 July 2011

drawing - the simple meaing is to "withdraw" where the same is used with capital account, the meaning goes as to withdraw capital..........it may be for personal use, for keep up living, for gift to kith and kins, or anything which can not participate in the assets side of balance sheet ( LIC premiums paid are also drawings)

Amit

Accountant

261 Points Posted on 05 July 2011

Thank you sharmasir. U have always been very helpful. Matter is clear now

sanjay

student

70 Points Posted on 05 July 2011

in your personal balnce sheet u can show as household goods purchased

CA ADITYA SHARMA

CA IN PRACTICE

16719 Points Posted on 05 July 2011

Originally posted by : U S Sharma
	drawing - the simple meaing is to "withdraw" where the same is used with capital account, the meaning goes as to withdraw capital..........it may be for personal use, for keep up living, for gift to kith and kins, or anything which can not participate in the assets side of balance sheet ( LIC premiums paid are also drawings)