I have a small business and I’m trying to figure out how to take and record owner’s draws. I set up an Equity account, and titled it “Owner’s Draw”. Does that work? The way I currently take a draw, is by transferring the money from my business account to my personal account. What is the correct way to take an owner’s draw? And if a transfer is correct, should I record it as an actual transfer? Even though I can’t assign it an account? Or if I should record it as a check? If I do write checks or record as a check, I don’t want it to look funny, or look like I’m receiving income twice. Thanks, so much!
Transfers are for money moving from one business account to another, do not use that feature.
If you are taking a draw, use the write check window and in the expense tab enter your Owner Draw account.
The entry created on your books decreases cash and increases the draw account, neither of which is an income account and therefore has no effect on your income statement. (they effect your balance sheet asset and equity sections)