Difference between drawings and withdrawal of capital


Withdrawal of Capital and drawing are two separate things. The withdrawal of capital is shown in Partner's Capital Account in the case of the fixed capital method. This means the Capital account of the partner will continue to show the same balance every year until and unless some fresh capital has been introduced or something has been withdrawn out of capital.
On the other hand, drawings reflect the goods or assets withdrawn by the partner for personal use. This is shown in the Partner's Current Account.

  • 0
What are you looking for?