Question # 26 - "Hey, I made $100K, shouldn't I see $100K in the bank?"

I get this one A LOT!

I cannot tell you where every dollar went, but the moneys gone because you either spent it, bought some assets and then sold them, or bought some assets then kept them.

More than likely, you bought something and it was charged to Owner's Distribution on your Balance Sheet. Came out of Cash, went into Owner's Distributions. Boom!

Accounting is a closed system. For every debit there is a credit.

When the spending is taking place, people don't really think about what they are doing with their money.