Owner's drawings
In one sentenceWhat the owner of a sole proprietorship or a partner takes from the business's cash or goods for personal use; it reduces equity, not profit.
Simply put
When the owner takes money from the cash box for household expenses, this is not an expense of the business but a withdrawal of part of their claim on it.
It is recorded in a separate account, then closed at year-end to the capital account or the owner's current account. Mixing it with expenses shows a profit lower than the real one.
Worked example
The owner of a sole proprietorship withdrew 5,000 SAR every month for personal expenses throughout the year.
Dr: Owner's drawings (debit)60,000
Cr: Cash on hand (credit)60,000
Drawings for the year (5,000 × 12), reducing equity60,000 SAR
Don't confuse it with
ExpenseAn expense is spent to run the business and appears in the income statement; drawings do not appear there.