Skip to main content
Feb 22, 2023 2:17 AM UTC
Solved

Owners Equity vs Owners Capital when closing Owners Draw Account

When doing year end closing of an owners draw account for a sole proprietorship, should the other side of the entry go into owner equity, or owner capital? Looking at other sites, they almost use them interchangeably, but I know they are not the same. The COA for this company currently only has an owners equity, so I am guessing to use it. Just wondering if someone could clarify a bit for me. Thanks!

Rustler
RustlerAnswer
Feb 22, 2023 12:35 PM UTC

Owner equity and Owner capital are the same, different names is all.

Yes equity drawing closes to equity (capital) with a journal entry
debit equity and credit drawing for the total in the drawing account

4 replies

Rustler
RustlerAnswer
Feb 22, 2023 12:35 PM UTC

Owner equity and Owner capital are the same, different names is all.

Yes equity drawing closes to equity (capital) with a journal entry
debit equity and credit drawing for the total in the drawing account

Feb 23, 2023 2:32 AM UTC

Thanks A Bunch Rustler!