Withdrawals by owner

Withdrawals by owner are transfers of cash from a business to its owner. These cash transfers reduce the amount of equity left in a business, but have no impact on the profitability of the entity. Withdrawals may occur when an organization is spinning off extra cash, or when the owner has an immediate personal need for the funds.

Only the partnership and sole proprietorship structures allow for withdrawals of this type. For example, the transfer of cash to an investor in a corporation would require a dividend payment. 

Related Courses

Law Firm Accounting 
Partnership Accounting 
Partnership Taxation