Owner withdrawals in journal?

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Michael Jones

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Sep 7, 2023, 5:52:49 AM9/7/23
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Apologies if this has been asked before. I'm just staring out with Ledger and have got a bit stuck.

I'm not quite sure I understand how to enter owner withdrawals in my journal. I know it's not an asset or a liability. What type of account is it?

At the moment I've just got something like this:

2023/06/11  MJ Monthly
  Assets:PW Current            £ -2500.00
  Withdrawals                  £ 2500.00

Do I need to be doing something with Equity?

Many thanks,

Mike

John Wiegley

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Sep 7, 2023, 5:03:48 PM9/7/23
to Michael Jones, Ledger
>>>>> "MJ" == Michael Jones <michael....@gmail.com> writes:

MJ> Apologies if this has been asked before. I'm just staring out with Ledger
MJ> and have got a bit stuck.

MJ> I'm not quite sure I understand how to enter owner withdrawals in my
MJ> journal. I know it's not an asset or a liability. What type of account is
MJ> it?

MJ> At the moment I've just got something like this:

MJ> 2023/06/11  MJ Monthly
MJ>   Assets:PW Current            £ -2500.00
MJ>   Withdrawals                  £ 2500.00

MJ> Do I need to be doing something with Equity?

Can you say more about what “owner withdrawals” are?

John

Michael Jones

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Sep 7, 2023, 5:22:39 PM9/7/23
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Hi John,

Owner withdrawals - I mean money that I take out of my business each month. 

I found this definition on the web:

"A withdrawal, when used in business terminology, is the withdrawal of funds from a company’s assets for private use."

I don't think it's an expense account. 

Mike

John Wiegley

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Sep 7, 2023, 5:38:34 PM9/7/23
to Michael Jones, Ledger
>>>>> "MJ" == Michael Jones <michael....@gmail.com> writes:

MJ> Owner withdrawals - I mean money that I take out of my business each
MJ> month.

It sounds like an asset transfer, from the company’s assets to your assets, is
that about right?

John

o1bigtenor

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Sep 7, 2023, 5:58:33 PM9/7/23
to ledge...@googlegroups.com, Michael Jones
IANAA but imo an asset transfer is an expense to one side and income
to the other.

The trick is that to the company its a special kind of expense and to the owner
its a special kind of income - - - especially true in the way that the tax man
sees the transactions.
Here I would check in what the gooberment has to say about it.

Ignore most of the following (from the Canada Revenue Agency - - - see line
9932.

(

Part 9 – Details of equity

If you are a partner in a partnership that must file a partnership
information return, do not fill in this section.

Line 9931 – Total business liabilities

A liability is a debt or an obligation of a business. Total business
liabilities are the total of all amounts your business owes at the end
of its fiscal period.

Total business liabilities include:

accounts payable
notes payable
income taxes and taxes payable
unpaid salaries, wages and benefits
interest payable
deferred or unearned revenues
loans payable
mortgages payable
any other outstanding balance related to the business

Line 9932 – Drawings in the current year

A drawing is any withdrawal of cash (including salaries) or other
assets, or services of a business by the proprietor or partners. This
includes transactions by the proprietor or partners (or family
members), like withdrawing cash for non-business use and using
business assets and services for personal use. Include the cost or
value of the personal use of business assets or services in your
drawings for the year.



HTH

Brandon Olivares

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Sep 7, 2023, 6:26:45 PM9/7/23
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As a professional bookkeeper, this is definitely an Equity. It should be something like Equity:Owner Draws. It is not an expense.

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Michael Jones

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Sep 10, 2023, 2:12:16 PM9/10/23
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thanks, that's really helpful. Also, thanks to the other people who replied.
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