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Vertigoat
Level 3

Am I entering Owner's Draw correctly?

I'm a sole member LLC.

I've got an "Owner's Equity" equity account set up and any time I Take money from my pocket and spend it on the company, I log it in this account and categorize it properly for tracking purposes.  

When I want to take money from the company, I created an "Owner Draw" equity account.  Do I write myself a check and use the "Owner Draw" account?  I noticed that if I do that, the draw account goes into a negative balance.  I feel like I should not have created a draw account and instead, wrote a check against the "Owner's Equity" account.

Which is correct?


Thanks!

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