Best Accountants in Delano, CA

An owner's drawing is not a business expense, so it doesn't appear on the business's income statement, and thus it doesn't affect the company's net income. Sole proprietorships and partnerships don't pay taxes on their profits; any profit the business makes is reported as income on the owners' personal tax returns. To record an owner withdrawal, the journal entry should debit the owner's equity account and credit cash. Since only balance sheet accounts are involved (cash and owner's equity), owner withdrawals do not affect net income. If you feel like you're constantly making decisions in the dark about your business finances, that's where I come in! Let's chat, book a call with us today! . . .