Capital is the amount invested in the business in order to further grow it or which is invested in the business to start a new business while Drawings is the withdrawals by the owners of the business from the business for personal use.


How to record drawings from capital?

The Account for capital and cash/bank are default account in ProfitBooks, user does not have to create them again.
For recording the drawings from the capital user have to pass journal entries. To pass journal entry follow the below-mentioned steps:

Step 1: Go to Accounting > Journal Entries, click on "Add New Record".
Step 2: Fill in the details like Date, Under project, if any.
Step 3: Under From Account select capital account and debit it with the amount and select cash/bank account and credit it with the same amount.
Step 4: Fill the description box for eg. "Drawings for owner" and
Step 5: Click on save and it's done.

Journal entry


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