yo what up cph strength strongest cpa in the state of Florida back at it again with basic accounting for beginners number 18 look at that s 18 right there let’s get it in this is a fucking highly requested video I really appreciate all the questions all the comments because you know i think my last three or four basic accounting videos have been questions that I get and comments i read all them so anyways thank you very much let’s do this this is number 18 what is a draw well you know me i need to fucking pn in its not smoke or don’t know your opinion I need something my hiding some my hands everything what is a draw now I’ve got this so many times Mike my clients have a hard time figuring out where it is i had a hard time figuring out where it is I’m sorry took me to 18 to talk about where is it’s just there’s a lot of stuff so here now and I figured we would start off with the definition in the accounting book this is probably you know what you’re seen as you’re taking the beginning accounting class so i’ll put it up right here what i’m reading from the book owner’s equity is the owners right to the assets of the business after all liabilities have been paid okay so it’s okay for proprietorship the owner’s equity is represented by the balance of the owners capital account ok so we’re dealing basically we’re dealing with equity right now but I’m doing that because the next sentence is a drawing account represents the amount of withdrawals made by the owner ok and i wrote that right up here so so this is from this is from the book a drawing account represents the amount of withdrawals made by the owner even in their thing given in the book definition a drawing is the amount of withdrawals made by the owner so that’s another so basically you see it’s raw synonymous with the withdraw and it’s by the owners it’s lessening the owner i always get questions on what to draw because that’s one of you know the components of dca blur and it’s a good question what is it raw you know I get this all the time all the time what is the draw is a positive positive definite side or Eric goes up on the debit side that strong now I was writing down this one is a draw the damn again boys again jack son so what is wrong i think it’s synonymous with a withdraw they even say in the book so it must be right what I use it a lot now this is an s-corp if you had an s corp and the owner takes out money out of the business it’s a shareholder distribution so that’s an S court and this is what most of my clients are this is what my businesses as well as an escort i really like it because of the shoulder distributions dividend would also mean the distribution is the D here this can also be a district Lucien and ok so called free distribution also a dividend is also withdraw it would go here but that would be for a c-corp so that’s also that but it’s a dividend that also goes here there’s a lot of things that go in the the derailleur draw distribution different a lot of deeds and I think probably the one of these are ways you know think of a draw and the books is drawing which I don’t like is in my fucked-up I don’t think you know a mom like draw a little picture something will stick that’s for another video about abbreviations and cut but I think if you’re beginning and you don’t really have this concept down pat yet if you see like stop writing down draw i know it’s adi but maybe you think if you start writing with with draw and then just like circle the draw because anything going to withdraw and most people know you know like you go to the bank and you’re withdrawing money so your business’s bank account in you withdraw money so you’re taking your taking money out of the business you can take other stuff of your equity but you’re basically you’re taking out of your business is it withdraw was the different kinds of I guess synonyms or I’m going to but so there’s like the synonyms of water draw is now we’re gonna get some more like this is actually the the crops of here what is a draw it reduces equity it reduces equity and if you see in the DC learn you know this is the this is the income statement this is the balance sheet here is the equity in the drop the drawbar distribution are given a withdraw it reduces the equity that’s what does it reduces the equity drawing account represents the amount of withdrawals made by the owner as you can see if you use your DC a blur that it changes the balance sheet mean our balance sheet is assets equals liabilities plus equity for the accounting equation we said that the draw count reduces equity well if you have a change in equity that’s part of the balance sheet means you’re going to have a change in the balance sheet alright it it does not it does not change the income statement income statement as revenues minus expenses and the draw has no bearing in that blessing to one of my clients this is how he understands a shoulder distribution or drawer it’s it’s a personal expense not a business expense let’s see my god we want we want soul so long please explain what a dry as or withdraw or explain it a little bit we’re going to do an example i was thinking about possibly to an example this video but going too long so i wanted so look for another video like if this helped you out share comment do your thing and it’s like this that she was going to come up here and take off that i put 50 rounding like a baseball draft deuces