How do you know if a drawings are debited or credited?

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2026-02-18 07:40

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In accounting, drawings are recorded as debits to the owner's capital account. This is because drawings reduce the overall equity of the owner in the business. When a drawing is made, it is debited to the drawings account, which is a contra equity account, and credited to the cash or asset account from which the drawing is taken. Therefore, if you see a debit entry in the drawings account, it indicates that funds have been withdrawn from the business.

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