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Should an owner's compensation be recorded as an expense or in the Drawing account?

Accounting Auditing Budgeting Financial Reporting Finance
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Question added by Rehan Qureshi , Financial Consultant , Self Employeed
Date Posted: 2013/12/26
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Rehan Qureshi
by Rehan Qureshi , Financial Consultant , Self Employeed

If the enterprise is a sole proprietorship, the owner's compensation should be debited to the Drawing account.If the enterprise is a corporation, the owner's gross compensation should be debited to a salary expense account.

MASOOQUE ALI
by MASOOQUE ALI , PAYROLL OFFICER , Arabian Bemco Contracting Co. Ltd

It should be expense.

 

Ravshanbek Abdullaev
by Ravshanbek Abdullaev , Accountant , Fajr Al Mustaqbal General Trading LLC

Drawing if business is a sole proprietorship, otherwise it is expenses.

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