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wk249
Level 2

Owners equity not increasing despite profits

Me and my partner both have our own equity accounts with sub accounts for drawing and contributions. We recently recorded and deposited a profit into our bank account. Despite this our equity balances are the same amount we started the business with. 

Solved
Best answer April 30, 2021

Best Answers
john-pero
Community Champion

Owners equity not increasing despite profits

Equity account balances only change when you add or subtract directly to them. Even at year end when profit posts to retained earnings, it sits in retained earnings until you distribute it. Everything you describe is exactly how it should be

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2 Comments 2
john-pero
Community Champion

Owners equity not increasing despite profits

Equity account balances only change when you add or subtract directly to them. Even at year end when profit posts to retained earnings, it sits in retained earnings until you distribute it. Everything you describe is exactly how it should be

View solution in original post

wk249
Level 2

Owners equity not increasing despite profits

Ok thank you, is there anywhere to see how much each member is entitled to draw/remaining profit to draw? My company is split 50/50.

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