Hello
i have 2 concerns:
1. I have business which started few months ago. In the begining, I spend money from my personal bank account to buy some material and pay bills for business. Where i have to record these expenses?
2. when i opened business bank account, i deposit some cash in there for early expenses. Where i will record these?
also what is owners equity account if you can explain a bit for me.
Hi
Owners equity is basically what the owner puts in or takes out of their business.
In owners equity there is a owners contribution/drawings this is where these can be recorded
So when you put money into the bank you would code the transaction to owners contribution ( 3-XXXX)
Expenses you pay for from your own funds I would suggest the following
Set up a bank account (1-XXXX) called Owners Funds/Personal Funds.
Pay those expenses to that account.
Then at the end of the month or quarter do a journal to transfer the balance of that account to the equity account.
If you buy anything or take money from the business account just code it to your equity account.
Hope that helps
Lisa
Thanks for the information.
What tax-code i have to use to create owners drawing/contribution equity account?
Hi
The tax code is N-T, not reportable
Lisa
