Answer to Question #177239 in Management for Zeryle faith

Question

The owner of the business is questioning why the gasoline and oil consumed by the family in going to cagayan by his family which was paid from cash of the business charged to his personal drawing he is claiming that since he is owner of the business he has the discretion to the use of business cash how would you explain your accounting for such payment?

Answer 1

Owners who take a distribution or draws of profits can take any amount they want from their business. Of course, they shouldn't take money that will be needed to employees or pay other bills of the business. One Important point about taking money from His business: You don't take money from "profits" because they aren't in the bank. You take money from the business bank account. Add your personal needs to your business budget and make sure you have enough each month to meet your business obligations first.