Get 50% OFF QuickBooks for 3 months*

Buy now
cancel
Showing results forΒ 
Search instead forΒ 
Did you mean:Β 
Announcements
Work smarter and get more done with advanced tools that save you time. Discover QuickBooks Online Advanced.

Reply to message

View discussion in a popup

Replying to:
qbteachmt
Level 15

Reply to message

"I was looking at my owner draw account in Chart of Accounts, and I noticed that almost all of the transactions are in the "decrease" column"

Taking funds = removing value. This is:

Assets= Liab + Equity

Removing asset = Decreases your Equity. Equity = Ownership Position.

"except for a few which are in the "increase column".  The Owner Draw account is negative."

Don't worry about that negative. Run your Balance Sheet, to see the full picture.

You are overlooking that Net Income is contributing to Equity; you cannot see this by looking at your Infrastructure = chart of accounts. Run Reports. Like this:

I took $10,000 draw, so that is negative for the year. But the Balance Sheet also shows Net Income is $50,000. Total Equity = $40,000. My ownership position is fine. Equity can also be referred to as Net Asset (asset minus liability).

QB will "close" net income to Owner Equity for you. You can close Draws, as well, on the first date of your new fiscal year. That way, the Chart Of Accounts shows only the current year Draws.


Need to get in touch?

Contact us