Drawings Journal Entry Question
Question:What is the journal entry for this transaction?
Owner withdrew office equipment from business $800.
This is a typical question to test you on the journal entry for drawings.
What makes it a bit more difficult than the usual is that the owner is withdrawing equipment instead of cash. However, that's the only difference.Here is the journal entry for the above:Debit: Drawings...................$800
Credit: Office Equipment.....................$800
Owner withdrew office equipment for personal use.
As usual, the drawings account is debited. This is because it is the opposite of capital, which occurs on the right side of our accounting equation
. Drawings occurs on the left side, meaning we debit this account.
The contra entry, the credit, is to the asset the owner is withdrawing. Assets
always increase on the left (debit) and decrease on the right (credit). So in this case we credit the Office Equipment account.
Hope that makes sense!
Feel free to add a comment or question further below.
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