Can someone give me a really simple explanation regarding drawings, profit and loss and the balance sheet and a really simple explanation of where the drawings come from
Eg SALES £20000
Less allowable expenses & Costs £12000
Net Profit £8000
Then drawings of £10000
How is this explained, I know Drawings go on the Balance Sheet but where have they come from.
I know it is a really dumb question but any simple quick explanation answers appreciated