Australia Sole Proprietor/ Trader Balance sheet outflows


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Nov 30, 2020
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Hi,

I am or have a Sole Proprietor/ Trader (Australia) business.

I'm trying conceptually understand how to "account" for outflow of income for living (but which are not business related expenses) on a balance sheet.

Problems I've encountered:

  • Personal spending of income can't show as an asset at the end of financial year due to the accumulated income is no longer present in business account. Or residual current amount is almost $0.
  • Personal spending can't be a liability because my income is not wages owed to me by the business.
  • If Personal spending is an expense then my "Retained Earnings" (under equity) for the year will be zero?
  • If Personal spending is transferred to a "Drawing/Withdrawal account" (under equity). The balance sheet is still showing an equity amount above actual bank account levels.
Can you help??
This problem has been making me crazy.
 
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Joined
Nov 30, 2020
Messages
2
Reaction score
0
Country
Australia
I've contacted the government Tax department several times - they couldn't or won't help me,
I've contacted my Accounting software tech support also several time - they don't even understand the problem.
 

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