S-Corp Distributions and GNUCash

[Mike or Penny Novack]

Tom Peterson wrote:

> I have an 'Expense:Shareholder Distribution' account so when I 
> distribute retained earnings I have a transaction involving the bank 
> account and the Expense:Shareholder Distribution account.
>
Best not to confuse him? An S Corporation is an incorporated partnership 
(in effect)

As usual I will begin by reminding folks that I am not a certified 
accountant and that this is really an accounting question, not a GnuCash 
question (do you know how you would do this were you keeping the books 
the old fashioned way pen and ink on paper?).

Drawing accounts are negative with regard to equity. Whether these 
drawings represent a net reduction of entity equity depends on whether 
the profits during the period (the retained earnings) are greater or 
not. For regular corporations distributions are supposed to come from 
profits (retained earnings) but partnerships are not restricted to that. 
I can't advise to the legalities of the "S" form.

Michael