Forum Discussion

Pal2's avatar
Pal2
Contributing User
2 years ago
Solved

Personal Income

Hello I am using Account Business Lite. Is Personal Income my personal money I put in to start my sole trading business? And is Personal expense the money I transfer back to myself? Thanks
  • Earl_HD's avatar
    Earl_HD
    2 years ago

    Hi Pal2,

    Thanks for your response. I recommend consulting with an accountant for an accurate solution, but here's how I would handle this situation. Initially, record the money you put into your business as a loan from yourself, creating a liability on your balance sheet representing the amount owed to you as the owner. When you wish to withdraw this money, classify it as an owner's drawing, reducing the loan liability on your balance sheet and reflecting the funds withdrawn for personal use.

    Feel free to post again, we're happy to help!

    If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

    Regards,
    Earl

jojolamor's avatar
jojolamor
Contributing User
2 years ago

I'm confused about this too - as I would have expected Funds Contributed and Drawings to be standard accounts in the chart of accounts. I'm confused in the same way as Pal2 who initiated this question.

 

Are ... Funds Contributed - the sames as MYOB's Personal Income, and;

Are Drawings - the same as MYOB's Personal Expenses, or ... the other way around.

 

As stated, I'm surprised these aren't standard in the Business Lite chart of accounts as a lot of users would be sole traders and these are pretty important categories.

 

Can anyone clarify - this shouldn't be a question to incur accountant costs - it is all just symantic but wanting to get it the right way around.

 

Thanks in advance. Much appreciated!

  • Earl_HD's avatar
    Earl_HD
    MYOB Moderator
    2 years ago

    Hi jojolamor,

    In MYOB's Business (Categories) chart of accounts, "Funds Contributed" and "Drawings" are not standard accounts, which might be causing some confusion. These accounts are indeed important for sole traders, as they help in tracking personal contributions and withdrawals from the business.

     

    To clarify:

     

    "Funds Contributed" typically refers to the money that the owner puts into the business. In MYOB, this is often categorized under "Equity" accounts.

    "Drawings" refer to the money that the owner takes out of the business for personal use. This is also categorized under "Equity" accounts but specifically tracks the withdrawals.

     

    In MYOB, "Personal Income" and "Personal Expenses" are not standard terms used in the chart of accounts. Instead, the focus is on business-related income and expenses.

    I hope this helps!

    Regards,
    Earl

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