The owner of the facility or one of the partners may withdraw cash or in-kind amounts from the facility for personal purposes, then a special account is opened for withdrawals called a personal withdrawal account.
Personal withdrawals
It is everything that the owner of the establishment or one of the partners withdraws from cash or in-kind amounts for personal purposes. If the owner of the establishment or one of the partners withdraws a cash amount from the establishment for personal purposes, then he
It is everything that the owner of the establishment or one of the partners withdraws from cash or in-kind amounts for personal purposes. If the owner of the establishment or one of the partners withdraws a cash amount from the establishment for personal purposes, then he
A special account shall be opened in the name of personal withdrawals, which shall be debited with the value of the withdrawals as follows:
Personal withdrawals in the form of goods:
The owner of the facility or one of the partners may withdraw goods for personal purposes, and then the value of the withdrawn goods is recorded either at the selling price or at the cost price, according to what is agreed upon between the partners.
The owner of the facility or one of the partners may withdraw goods for personal purposes, and then the value of the withdrawn goods is recorded either at the selling price or at the cost price, according to what is agreed upon between the partners.
Recording personal withdrawals in the form of goods valued at cost
When the owner of the facility or one of the partners pays what has been withdrawn, a reverse entry is made with the value of the paid amount, as follows:
Recording the payment of personal withdrawals
Recording the payment of personal withdrawals
Closing the personal withdrawal account
The personal withdrawals account, as previously explained, is one of the temporary accounts, so at the end of the financial period, the personal withdrawals account is closed in the capital account or the current account of the owner of the establishment, so that the personal withdrawals account becomes on the credit side.
The personal withdrawals account, as previously explained, is one of the temporary accounts, so at the end of the financial period, the personal withdrawals account is closed in the capital account or the current account of the owner of the establishment, so that the personal withdrawals account becomes on the credit side.
Recording the closing of the personal withdrawals account in the capital account
Debtor creditor statement
xxx
From h/capital
Debtor creditor statement
xxx
From h/capital
xxx to h/personal withdrawals
Closing the personal withdrawals account in the capital account
But from a practical point of view, and so that the capital account balance does not differ from what is registered in the company’s articles of incorporation, it is preferable that the personal withdrawals account be closed in the current account of the owner of the establishment or the partner’s neighbor, taking into account the laws and regulations in force in the country.
Recording the closure of the personal withdrawals account in the current account of the owner of the establishment
Debtor creditor statement
xxx
From the owner of the facility
xxx to h/personal withdrawals
Recording the closure of the personal withdrawals account in the current account of the owner of the establishment
In this lesson and the previous ones, the focus has been on the accounting treatment of the elements of property rights (capital and personal withdrawals) in sole proprietorships. As for companies of persons (partnership and simple recommendation), the accounting treatment methods for capital accounts, personal withdrawals, and the method of distributing profits and losses between partners and others will be Explained in the corporate financial accounting department.
Add New Comment