Accounting For Beginners #18 / What is a Draw? / Withdraw / Distribution / Dividend / Equity

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


what is a draw now I've got this so many


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


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


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


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

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