Hi All, 

I am a bookkeeper for a sole proprietorship. When I took over last year I was basically left to figure everything out on my own and told to go off what had already been taking place. The business has never closed out Drawings at year end. I thought that Owners Drawings was a temporary equity account that was supposed to be closed out to some other account like Retained earnings? or Owners Capital?

Right now the balance sheet essentially shows all four years of drawings took place in 2015.

The Chart of Accounts that I inherited has the following Equity Accounts (class included):

3000   Equity         H

3100  Capital Contributions   A

3200   Drawings        A

3225   Total Contributed Surplus    S

3300  Retained Earnings      G

3600   Current Earnings    X

3950   Total Equity       T

Thus far I have only ever made entries to 3100 and 3200 and have never touched any of the others. 

Can someone confirm if the drawings needs to be closed, if so how, and do I go back and pull the end balance for each year and do an individual transaction for each year past that it hasn't been done?

Sorry for the novel. More information is always better than less in accounting, or so I have found.

Thanks so much, 

Kelly