Loans & drawings · Level: Basics
Journal entry: Cash drawings
The owner takes money for private use. It reduces capital and is collected on the Drawings account.
Worked example
£1,550.00 in cash is taken from the till for private use.
Correct journal entry
Drawings £1,550.00 / Cash £1,550.00
Debit
Drawings£1,550.00
Credit
Cash£1,550.00
Why?
- Drawings: drawings reduce capital → debit
- Cash: asset decreases → credit
Typical mistake
Booking drawings as an expense.
Your turn
Three problems on exactly this case, with different numbers. Amounts work with or without separators, e.g. 2,400.00 or 2400.
Transaction
£1,450.00 in cash is taken from the till for private use.
Debit
Assets up · expenses · liabilities down
Total debit£0.00
Credit
Liabilities up · income · assets down
Total credit£0.00
Frequently asked questions
What is the journal entry for cash drawings?
Example: Drawings £1,550.00 / Cash £1,550.00.
How do I recognise this case?
The owner takes money for private use. It reduces capital and is collected on the Drawings account.
What is the typical mistake?
Booking drawings as an expense.