Withdrawal of Funds from Partnership

During the course of partnership business, any partner may ask for withdrawal of funds or other assets. Such withdrawal is recorded into the drawing account of each partner. Just like the sole proprietors accounting, the drawing account is maintained for each partner in the accounting system.

Example Question

Adam, Boon and Chelsey are the three partners in the partnership firm ABC. In the operations of the business, following drawing happen from the business:

Adam withdrew furniture costing $70,000 and cash $50,000.

Boon withdrew vehicle $120,000 and cash $30,000.

Chelsey withdrew inventory $80,000 and cash $60,000.


Journalize the above transactions.

Close the drawing account of each partner in the partnership firm.


Description Debit Credit
Adam's drawing  120,000   
   Cash    70,000 
   Furniture    50,000 
Boon's drawing   150,000  
   Cash    30,000 
   Vehicle    120,000 
Chelsey's drawing  140,000  
   Inventory   80,000 
   Cash   60,000 
Journal Entry toclose drawing accounts:    
Adam's capital 120,000  
Boon's capital 150,000  
Chelsey's capital 140,000  
   Adam's drawing   120,000
   Boon's drawing    150,000 
   Chelsey's drawing   140,000


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