Definition of 'Drawing Account'
The drawing account is a separate account from the business's operating account. This means that the owner's personal expenses are not commingled with the business's expenses. This can help to keep the business's finances organized and transparent.
The drawing account is also used to track the owner's draw. The draw is the amount of money that the owner takes out of the business for personal use. The draw is typically based on a percentage of the business's profits.
The drawing account can be a helpful tool for small businesses. It can help to keep the business's finances organized and transparent. It can also help to track the owner's draw.
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