ABSTRACT
The owner of a sole proprietorship may regularly withdraw cash or take products from the company for his or her own private use. It is also possible that the owner invests cash in the company, for example when cash is short. Entries in the ‘equity’ ledger account are never made directly, which is why a new specialised equity account is introduced, the ‘withdrawals’ account. This chapter familiarises students with the preparation of the withdrawal accounts. Examples are provided to show the journal entries of the withdrawal accounts. The chapter also includes multiple exercises that help students try themselves and prepare the withdrawal accounts for a set of financial scenarios.
