Combining the Accounting equation and the Double entry principle

Accounting is a visual discipline. The Accounting equation could be expressed in T-account form as follows:

accounting equation




Drawings is what the owner(s) takes out of or remove from the business. It has the effect of reducing what the business owes the owner(s). In other words it reduces the equity. Other than cash the owner could remove stock or stationary out of the business for own use.