Difference between Drawings Against Capital and Drawings Against Profit.

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Are you looking for the difference between drawings against capital and drawings against profit.

Here are the below differences between both.

BasisDrawings Against CapitalDrawings Against Profit
Where DebitedIt is debited to capital accountIt is debited to drawings account
PartIt is against CapitalIt is against expected profit.
EffectIt reduces capitalIt does not reduce capital
Interest on DrawingsIt is not considered for calculating interest on drawingsIt is considered for calculating interest on drawings
Interest on CapitalIt is considered for calculating interest on capitalIt is not considered for calculating interest on capital
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Anurag Pathak
Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his Youtube channel for free lectures

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