Getting Paid As a Sole Proprietor

by Val
(California)

How do I record the money I withdrawal from my business for myself? I am a sole proprietor of a small pet store and doing my own bookkeeping. I've always been confused about the correct way to account for paying myself. Thank you!

To record the money you withdrawal from your business for yourself as a sole proprietor, you will first need to set-up an Owner's Equity account in your Chart of Accounts called Owner's Draw. Then the withdrawal would be recorded with a debit to the Owner's Draw account and a credit to the Bank Account.