Sole Proprietorship Business Bookkeeping Question

by AAMERAH
(PUNE)

Sole Proprietorship Business

Do you have any 10 questions based on a sole proprietorship business?

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.

Proprietor Contribution

In a sole proprietorship how do I account for business expenses paid from personal account and visa versa?

Hi,

Thank you for your question.

In a sole proprietorship, business expenses paid from your personal account would be entered as an adjusting journal entry as follows:

DEBIT Expense Accounts
CREDIT Owners Contribution

On the flip side, personal expenses paid from a business would be posted as:

DEBIT Owners Draw
CREDIT Bank Account

PROPRIETORSHIP EXPENSES

by B.Khanra
(Uttarpara)

Can I show proprietorship expenses in P&L A/c? It is valid for Indian Income tax.

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