An owner's draw account is an equity account used by QuickBooks Online to track withdrawals of the company's assets to pay an owner. If you're a sole proprietor, you must be paid with an owner's draw instead of employee paycheck.
To create an Equity account:
- Select the Gear icon at the top, and then select Chart of Accounts.
- In the Chart of Accounts window, select New.
- From the Account Type drop-down, choose Equity.
- From the Detail Type drop-down, choose Owner’s Equity.NOTE: S Corporations use Owner’s equity to show the cumulative net income or loss of their business as of the beginning of the fiscal year.
- Enter an opening balance.
- Select Save and Close.
To write a check from an owner's equity account:
- Select the Create icon ⨁.
- Select Check.
- Choose the bank account where your money will be withdrawn.
- Select Print later if you want to print the check.
- Fill in the check fields. In the Account field, be sure to select Owner's equity you created. The memo field is optional. It appears in the register, on printed checks, and on reports that include this check.
- Select Save and Close or Save and New to write another check.