I read that an owners drawing from the company funds reduces owner's capital. The drawing is treated like an expense. Does the drawing go on the income statement as an expense or is it just recorded on the Owner's equity as as a drawing? Please explain why.
I am working on a problem in my Accounting Principles Textbook by Weygandt in Chapter 1, Page 38, P1-4B. When I included the drawing in the expenses category of the Income Statement, I got the correct answer. I don't understand why the drawing is counted as a regular expense during the period and recorded on the equity statement?
Thanks
I am working on a problem in my Accounting Principles Textbook by Weygandt in Chapter 1, Page 38, P1-4B. When I included the drawing in the expenses category of the Income Statement, I got the correct answer. I don't understand why the drawing is counted as a regular expense during the period and recorded on the equity statement?
Thanks