Category for Drawings With Just a Personal Bank Account?

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  • Updated 4 weeks ago
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I am currently a sole trader and using just my personal account as my current needs are very simple. I am confused over the issue of entering drawings. I understand that I should make a bank entry but I am unclear as to what category it should go under as there is no category for drawings.

I have looked at all the other questions and the short videos but none of these seem to give a clear answer. I see that if I change the bank account type to to business I can make a drawings entry, but it is not a business account.

So in order to show that I have spent the money and reduce the retained profit on the profit and loss and the balance sheet, what category should I put it under?
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Nigel Ainscoe

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Posted 8 years ago

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Charissa

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Hi Nigel,

Thanks for contacting FreeAgent.

Because this bank account is a personal account, you do not have to explain any money you take from yourself therefore you can leave these types of transactions as unexplained.

Please see our link which explains personal bank accounts in FreeAgent; http://www.freeagent.com/support/kb/b...

I hope this helps,

Kind regards,

Charissa
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Nigel Ainscoe

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It doesn't help really because it doesn't answer the nub of the question:

"in order to show that I have spent the money and reduce the retained profit on the profit and loss and the balance sheet, what category should I put it under?"

If I don't make an entry somewhere my balance sheet is completely unrealistic, showing retained profit in the business which isn't there anymore.
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Carl Michael

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Hey Nigel. I appreciate that this os over 5 years old now, but did you ever find a way to get a realistic balance sheet, and cash at bank figure? Like you, I can't just change my account from personal to business due to locked periods
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Ben Gray

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Similar position as Nigel and Carl - I know I don't have to explain my 'drawings' but I do want to categorise them so that my balance sheet showing retained profit is accurate. Why can't there be an option for that? If I change the option from personal to business account then I have to explain everything in the account so this doesn't seem to be the appropriate thing to do either.