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Recording Owners' Draws

When owners take money out of a company that is not a corporation, the money is either classified as a loan or a draw. A draw account is an owner account that is increased by the earnings of the company and decreased by the amount of money the owner takes out of the company. Non-corporations need to set up a draw account for each owner. You might want to create a master equity account for all owners and then a subaccount under the master account for each individual owner's draw.

Set Up a Draw Account

Press Ctrl+A to open the Chart of Accounts.

Press Ctrl+N to open the New Account window.

Select Equity in the Typelist.

Enter a name for the account.

Indicate whether this is to be a subaccount of another account.

Enter an optional description.

Click OK to save the account.

Record an Owner's Withdrawal

Press Ctrl+W to open the check window.

Verify that the correct cash account appears.

Enter the name of the owner who is withdrawing money from the company.

Enter the date.

Enter the amount.

Enter the owner's draw account.

Click a save option.