The Tax Effect of Owners' Drawings

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The Tax Effect of Owners' Drawings

Introduction

The owners of a business can withdraw money as cash from the business. In this way, they can compensate themselves for the investment that they had made initially. In addition, these drawings can also help the owners compensate themselves for the services that they rendered the business to run the business. In addition, these drawings can serve as the provision of total compensation, including the provision of return on investment, to the business owners.

The drawings accounts and the facility are only available to the owners of a sole ...