390 Drawings

Owner’s Equity

Net Worth

Synopsis

Account 390, Drawings is established to record the amount of funds withdrawn from the dealership by partners or owners of an unincorporated business.

Debits

Credits

Withdrawals (other than salaries) during the current year by a proprietor and by partners

Balance in the account at the end of the accounting year

Example 1

Record the cash withdrawal (other than salary) of $10,000 by one of the partners.

Journal: Cash Disbursements

Entry:		Debit	Credit
Account 390	Drawings	$10,000
Account 202	Cash in Bank		$10,000

Example 2

Record the transfer of the balance ($10,000) in the drawings account at the end of the accounting year.

Journal: General Journal

Entry:		Debit	Credit
Account 380	Investments	$10,000
Account 390	Drawings		$10,000

Note:

Separate general ledger accounts should be provided for each partner. The balances in these accounts should be combined in Account 390, Drawings on the operating report.