Treatment of proprietor's drawing

This query is : Resolved

sushant (Querist)
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12 July 2013 What is the treatment of Proprietors drawing from bank a/c for personal use. i know the basic entry like- Drawing a/c--dr
to capital a/c.
But is this entry applicable for the proprietor's drawing like- payment of school fees, lic prem, mobile bill (spouse),Atm withdrawn, purchase personal assets through Debit card.etc.

Because if we will debit the capital in all this transaction then the capital will be decrease at regular interval and at final it will reach into nil.

So please suggest me how to deal with this kind of transaction for Proprietorship Company.

CA Pooja Agarwal

CA Pooja Agarwal (Expert)
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12 July 2013 generally the capital balance increases with profit earned..if there is no profit but withdrawls, definitely the capital will go on reducing..