How do we know the direction to draw the arrows for voltage drops and current direction when drawing a circuit diagram for an ac circuit?
If you had no polarity signs you would have a 180 degrees ambiguity on the phase of involved quantities.

Say you have a sine ruled voltage source, at t=0 is voltage rising or falling? The positive terminal is the answer.

The same applies to all the quantities, voltages and currents around the circuit .

There can indeed be cases where this doesn't matter at all, e.g. a single generator but it generally does matter.