A draw is the accounting word for withdrawals by an owner, recorded in the owner's drawing account: cash or other business assets that the owner of a sole proprietorship or partnership takes for personal use. Owners of these businesses do not pay themselves a salary in the accounting sense; they take draws instead.
How draws are recorded
A draw is recorded with a debit to the owner's drawing account and a credit to Cash, or to whichever asset was taken. The drawing account is a temporary contra-equity account. At the end of the year it is closed to the owner's capital account, which reduces owner's equity by the total drawn.
For example, if Maria withdraws $3,000 a month from her bookkeeping practice, her drawing account will show a debit balance of $36,000 at year-end. The closing entry debits Maria, Capital and credits Maria, Drawing for $36,000.
A draw is not an expense, so it does not reduce the business's net income. It appears on the statement of owner's equity, not the income statement. For US federal income tax, a sole proprietor is taxed on the business's net profit whether or not that profit is drawn out, so the size of the draw does not change the tax owed. Corporations do not use draws; shareholders receive dividends, and shareholder-employees receive wages.