Question

what is difference between drawing and withdrawal of capital?????



answer me fast if u know..☝☝

Answer 1

In Drawing any assets, cash can be withdrawn, but In withdrawal of capital, Capital amount introduced is withdrawn..

Answer 2

hey Maggie
here is ur answer
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When a businessman draws money or goods from his business against his profits, it is called drawings.  Basically proprietors and partners have an idea of the profits they are making from their business.  Keeping the profits in mind, they keep on drawing money from the business for their expenses.  Ideally it is less than the profits being earned by the business.  Drawings may be debited to Drawings Account or Capital A/c, if Capital Accounts are being maintained as fluctuating capital accounts. This may or may not reduce capital of the business.  If Partnership Deed permits then interest can also be charged on drawings.

     In contrast to drawings, Withdrawal of Capital is a permanent withdrawal.  Due to this withdrawal, capital of the business reduces.  This amount is debited to capital account, whether capital account is maintained as a fixed or fluctuating capital account.  No interest on withdrawal of capital is applied.
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I hope this will help
#Prem✴✌✴✌✌