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April 8, 2019
Solved

What account do I need to set up for sole trader drawings (ie paying myself)?

  • April 8, 2019
  • 1 reply
  • 3 views
No text available
Best answer by john-pero

You need an equity account for draw. You need a separate equity account for contributions which could be as simple as a business item you paid from personal funds And you should have a third equity account that tracks your actual ownership. Annually on first of year you would clear draw and contributions to the third equity account.

 

Best scenario is to have these 3 equity accounts as sub accounts of a parent summi g equity accou t that you never post to buthives you an instantaneous picture of your total equity in spite of draws or contributions

1 reply

john-pero
john-peroAnswer
Level 12
April 8, 2019

You need an equity account for draw. You need a separate equity account for contributions which could be as simple as a business item you paid from personal funds And you should have a third equity account that tracks your actual ownership. Annually on first of year you would clear draw and contributions to the third equity account.

 

Best scenario is to have these 3 equity accounts as sub accounts of a parent summi g equity accou t that you never post to buthives you an instantaneous picture of your total equity in spite of draws or contributions