Are drawings classified as debit or credit?

Understand the Problem

The question is asking whether drawings (which refer to the withdrawals made by an owner from a business for personal use) are classified as a debit or a credit in accounting records. This is a fundamental concept in accounting related to how transactions are recorded in the books.

More Information

Drawings are recorded in the drawing account as a debit because they represent money withdrawn from the business by the owner, reducing the owner's equity.

Tips

A common mistake is to record drawings as an expense. They should be recorded in a separate drawing account as they directly affect owner's equity.

Sources

• Dictionary | Drawings - debitoor.com
• Drawing Account: What It Is and How It Works - Investopedia - investopedia.com
• What Are Drawings in Accounting? - GoCardless - gocardless.com