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Suspense Accounts
by Varsha Leaving Cert Accounting — 03/06/16 2

When do you use drawing and when do you use capital account?????? Please help..


2 Comments
McDaida — 03/06/16
Drawings occurs when the owner takes something from the business (eg vehicles, equipment), Capital is when the owner introduces something into the business (eg money, vehicles, holiday tickets etc). In LC suspense, when an owner introduces something into the business but draws something at the same time, the drawed amount is offset vs the capital amount. (ie If the owner gives the business a car valued at $20,000 but takes a fridge valued at $10,000, enter 10,000 into the capital account (20,000-10,000) and then make other relevant entries.)
Varsha — 03/06/16
Thank you soooo much!!!! That makes so much sense
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