Accounting glossary
What is drawings?
Money an owner takes out of an unincorporated business for personal use. Drawings are not salary and not an expense — they reduce owner's equity. Corporations use dividends or payroll instead; mixing these up is a classic year-end cleanup.
Example
A sole proprietor takes $2,000 out of the business for personal use. That is drawings — a reduction of owner's equity, not a business expense.
Treating it as an expense would understate profit and overstate costs, which is one of the most common errors in unincorporated bookkeeping.
In SeroBooks
An equity account in the chart, posted like any other controlled entry. Chart of accounts →
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