Accounting for returned monies
I purchased personal item with Business credit card then transferred amount back to Business bank account (not credit card); how do I account for this please?
Forum Discussion
2 Replies
Business Owners often use a Business Credit Card to pay for Personal Expenses.
Not an Activity that the ATO recommends.
Good you recognised the "error" and have paid the amount back.
You could use Shella's method (which is similar to a Suspense account).
Otherwise post both entries to Owners Drawings if a Sole Trader or Directors Loan if a Company.
Duncan
Hi Occupational,
To keep everything straightforward, you’ll need to set up a new account in your bookkeeping to record the transaction properly. You can name it something like "Personal Reimbursements" whatever makes sense to you. Then record the transfer back into the business bank account against that new account. Just a heads-up though, it’s always a good idea to run this past your accountant to make sure it’s spot-on.
Cheers,
Shella
