Accounting For Owner Contributions and Distributions with QuickBooks

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21 дек 2011

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Комментарии : 202

@danm2092 4 года назад

Your sense of humor makes this so much easier to digest

@martincortes702 11 лет назад

As someone who is just starting to learn quickbooks and bookkeeping, your videos are great and detailed without the boring fluff. Much appreciated. Thanks

@LaFanfanTulipe 5 лет назад

I just love to listen to Nerd Enterprise. He is precise, logical and knows his accounting. He is my savior! Thanks.

@nerdenterprises 5 лет назад

Thank you Maya!

@AghaJaswer 6 месяцев назад

im watching your video in 2023 and believe me i spent many days understanding equity from many new videos but surprisingly this 11 years old video perfectly told me what to do and cleared my core concept hats off sir

@brianm9480 4 года назад

I come back to this video all the time (I have a one man engineering company and tend to let the bookkeeping slide for extended lengths of time). I searched a ton of ways to do this and came across this a few years ago and come back for a refresher when the stuff really piles up (like today!). Great job, exactly what I needed.

@nerdenterprises 4 года назад

Thanks Brian! So glad this helps! You might also like this video: If You Mix Up Personal And Business Expenses In Quickbooks Online ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-XbbbFcVGoTA.html

@nerdenterprises 11 лет назад

You can never hear something like this too often. Thank YOU for the accolades. You just made my day :)

@jugalenterprise5390 8 лет назад

Its awesome. I am new to my business and literally spend around 2-3 hours until i found your video. i was confused with other links. Everyone was telling about creating those 3 accounts-equity,investments,drawing but nobody was clearly mentioning what happens to my intital investments after i register them in equity. Actually my mistake was i was providing an initial balance of the equity and i was trying to bank deposit thinking that it will transffer from my equity to bank and then i will be able to use it for expenses/purchases. However, i was wrong. Equity stays for ever until owner draws it. Purchase/expense happens from bank/pretty cash and they balance out. i am new and it might be very easy thing for others but i am sure many folks like me will be benefited from this..I definitely like to recommend you in case somebody need some help...Thanks a lot.

@stoneybrook57 5 лет назад

ive been looking for this advice for a week and this is the first video that explained it the way i needed it explained! thank you SO much!

@TessaJuly1967 12 лет назад

Watched your cast completely. The process seemed redundant but, forgot you said, this is a vehicle for tracking petty cash transactions in QB. Now I know what to do when I come across receipts paid by personal means. You're the man, Thanks.

@tastypistachio 10 лет назад

Holy Cow! Thank You! I'm a science buff and always relish when you hit one of those a-ha moments! Then I smile! Just watched this tutorial.... it left me smiling. I'm off to Quickbooks. Hopefully this won't be as drag of a weekend as I thought it might be! Cheers, Seth!

@st-tube 3 года назад

10 years later this is still fantastic

@nerdenterprises 3 года назад

Thank you!

@MegaRepairs 2 года назад

Thank you very much appreciated... easy clean and professional!

@pxyvision001 6 лет назад

Awesome video and very organized presentation. Thank you so much. You helped me set up our S Corp!

@nerdenterprises 11 лет назад

Hi! The idea is that the petty cash items are things that were paid for by the shareholder. So I close it out monthly to the Shareholder contributions account. This way it ultimately shows that the shareholder contributed to the business. You could just book journal entries, debit expense, credit S/H contribution. That's how I do it. This method is for people who are afraid of Journal Entries :)

@nerdenterprises 11 лет назад

Yes. I just teach the petty cash method for people who don't want to post journal entries. Also if you have a lot of transactions like this you will probably find it much easier to post checks than to post lots of journal entries.

@nerdenterprises 10 лет назад

Awesome! I love knowing about it when something I've done has really helped someone! Thanks!

@nerdenterprises 11 лет назад

So glad you still have your hair and that I could help you keep it :)

@ammanhybrid8843 4 года назад

Thank you Sir, in my case getting money from investor is not a challenge but being in Harmony with my numbers is, so Thanks again

@MultiMononita 12 лет назад

I love the way how you explain. Thanks!!!

@durairanganathan5059 2 года назад

I feel like 'owe you', after learning so much from your videos for FREE. Thanks for amazing videos! From.....one of your student you never met :-)

@nerdenterprises 2 года назад

Wow, thank you!

@smilewait4flash 12 лет назад

YOU sir, have just earned yourself another sub! Thanks for the great info!

@sevrensmith 7 лет назад

just started an S-Corp and this video was incredibly helpful! Only suggestion would be to make a video with the new version of QuickBooks... but i feel like everyone should be able to take what you've taught us here and replicate it in the new version. Thanks so much!

@nerdenterprises 7 лет назад

Thanks Steven. We are actually in the process of completely re-designing NerdEnterprises.com. Once that is done, we will begin rolling out all updated content with videos (of course) on a lot of these same topics. Much emphasis will be place on QuickBooks Online, of course, but we'll also look at some of the topics in the desktop version.

@AbslutZr 6 лет назад

Great video for us noobs. Thank You!

@nerdenterprises 11 лет назад

Thanks Kathy! Glad you liked it :)

@nerdenterprises 11 лет назад

Yes, that's correct. Each partner gets their own section in the Equity section.

@sonnylloyd2899 6 лет назад

your aside comments are super useful for understanding. thanks for sharing your knowledge

@nerdenterprises 6 лет назад

Thank you Sonny!

@TheSugarplum770 12 лет назад

omg! Seth, you're a wonderful teacher. Love your videos. tfs.

@praysedangler 12 лет назад

This is the most helpful video I've ever watched. Thank you so much! =)

@nerdenterprises 10 лет назад

Hi! Essentially you can create a petty cash account (bank account) and write checks out of it. Then each month close out the petty cash balance by recording a deposit and book that deposit to "Shareholder Contributions."

@parkashland 10 лет назад

Thanks Seth, I like your QB videos.

@nerdenterprises 11 лет назад

Awesome! It is so good to get these comments. I really appreciate it - let's me know I'm doing something right.

@csjimenez3536 2 года назад

Thank you for your video. It was very helpful.

@DennisBuckley180 2 года назад

Man, I like this guy!!!

@nerdenterprises 2 года назад

Thanks!

@nerdenterprises 12 лет назад

Fantastic! Glad you liked it!

@nerdenterprises 11 лет назад

Yes. I have a video on "entering receipts" that walks you through this but it sounds like you know what to do :)

@kathycostello2681 11 лет назад

Excellent video - thanks for posting!!

@nerdenterprises 10 лет назад

Hi. If you've loaned money to the business then when you write yourself a check to repay that loan, you simply record it through that same account you used when you loaned the money; shareholder loans (Liability) or Shareholder Distributions (Equity). The money runs through the balance sheet both in and out which means, no income or expenses are ever touched.

@nerdenterprises 12 лет назад

Spectacular! Thanks so much and please let me know if I can answer any questions you might have!

@jackiebrown3230 7 лет назад

You rock! Excellent tutorial. Thank you.

@nerdenterprises 7 лет назад

Thank you!!

@bravocharle8998 10 месяцев назад

~ Damn straight!! Awesome video brotha!!!

@nerdenterprises 10 месяцев назад

Thank you!

@carolntodd 7 лет назад

Very good video!! Thank you so much!!

@SnowPuffKing 11 лет назад

Great video, thanks for the tips!

@01hadassah1 12 лет назад

Seth God Bless you and keep you teaching ,,Thank so much or your time!! and kwnoledge..

@jamesstricklen7617 6 лет назад

Awesome video. Still applies to 2018. :-)

@estephanenterprisellc7439 7 лет назад

YES THE ONE

@DeejNTexas 11 лет назад

Thanks for what you do! You're awesome!!! You've probably already heard that, right???

@planetcigars6577 10 лет назад

Thanks for the Tips

@TamaraNicklas 9 лет назад

These videos are great - so happy I finally found them!! Wondering if you had any advice (or could record a video) to show how a small home based business would record a rental payment to the Owner? And to take it a step further to have that rental payment show up/print on a 1099....

@nerdenterprises 8 лет назад

+Tamara Nicklas If the home based business has no entity (eg Corp, or LLC) then you can write a check from the company to the owner, but the company's rent expense, will be the owners rental income, so it's kind of a wash. Otherwise you would write a check from the corp or llc to the individual, and book it to rent expense.

@nerdenterprises 12 лет назад

@elegantrose1 Thanks Rhonda. You are right, that is a good way to do it. I recently worked with someone whom I showed how using the method you describe we were able to transfer Pre-paid inventory into the actual inventory by putting a negative line item in the expenses tabs for the value and then in the items tab we added the inventory Quantity and Unit Cost for the same value. The check is '0' and the inventory is updated perfectly!

@reginapeters5690 9 лет назад

Excellent! Thank you. :)

@nerdenterprises 8 лет назад

+Regina Peters Thanks!

@nerdenterprises 12 лет назад

Thank you!

@perfecttaccountingwithjenn 6 лет назад

All I have to say currently is that your funny and smart. Thanks for the video.

@nerdenterprises 6 лет назад

Thank you Jennifer!

@perfecttaccountingwithjenn 6 лет назад

You're welcome Seth!

@rudawg101 7 лет назад

Thank you for the great info. Can this be used also when a Shareholder pays for a personal expense with a company checking account? As a distribution instead of a contribution though. What happens at the end of the year? Would that distribution be taxable if left on the books?

@nerdenterprises 12 лет назад

Thanks!

@nerdenterprises 11 лет назад

Yes it is ok for owner's capital to be negative. What it suggests is that you've drawn out more than you put in (and possibly beyond your cumulative earnings). Where you want to be careful on this is with an S-Corp. If you draw more than your income you could be looking at a taxable event! Next time call ME :)

@anthonysmith124 6 лет назад

Thank for the video. two questions if possible.. How do you record increases and/or decreases to the capital account(Lets say these funds were used for trading stocks) Do I need to create a separate company if I want to keep track of both business and personal finances? Thanks in advance

@amitsonu74 10 лет назад

This is a great video and I must add that you are a great speaker! I wonder to see a video on if a Business Credit card is used for personal use, how these transactions are booked in quickbooks? I have a S Corp with 3 share holders on 34, 33, 33 split. One guy keep on using the card for his personal use, whereas others don't. So how do we book this?

@AmySatori 7 лет назад

Thank you so much. I have an LLC (but it's just me). I'm trying to go back through last year's statements and assign categories for past purchases made out of my personal account since, back then, I was mixing business and personal expenses (now, I've separated them). Inside my personal account, should these business purchases be "Business expense" or "owner contribution"? And, within my business account, if I pay for rent (personal) out of my business funds, is it considered a "Member draw" within my business account?

@nerdenterprises 7 лет назад

Amy Satori hi. if the business pays a personal expense, it's an owner draw. if you pay a business expense from personal, that can go to an asset account called investment in business. then on the business books, you record the expenses, as owner contributions. easiest way is with a journal entry. debit the expense, and credit owner contributions.

@hannekebb 8 лет назад

Hello, great tutorial......I have a question though.......I set up the Shareholder Capital account along with the contribution and distribution.....my question though is that I have a carry forward balance to put in there and I cannot make a deposit in the Bank because it was deposited in my old system. I did an opening balance when I created the account, put it placed it in Opening Balance Equity, not in the Shareholder Equity. Is this okay or is there a way of moving it out of there and into Shareholder Capital?

@llee29 8 лет назад

Hey Seth, I am wondering if there is a way in Quickbooks to set up a direct deposit to pay my shareholder distributions to the owner and his wife for their weekly pay?

@chuckanderson2014 3 года назад

Thank You for the great system information. Are you doing the 2020 QB information Up Date??

@nerdenterprises 3 года назад

I don't use the desktop versions any longer, but check online. There are usually people (used to be Charlie Russel but I'm guessing he's retired by now) who will write up articles explaining if there are any issues with updates.

@njaytexas2066 7 лет назад

I have a question, whenever you pay yourself as an SCorp.... In QB 2016, do you pay yourself as a Vendor or Employee or Customer? It does not give you an option on QB2016 to check "other" as seen you in your video. Thanks

@shannonhentschell6333 5 лет назад

Hi there - I appreciate your videos. In this one, you reference "another video" about posting journals (instead of using the Petty Cash option). Can you point me in that direction? I couldn't tell from the titles of your videos which one it was that I should watch. Thanks so much!

@paulhooper2137 6 лет назад

Hello, Im a bookkeeper for a company that has been in business for over a year, no one has done the books at all! so there are 5 partners in a s-corp, the client was supposed to start paying them a budget salary, but city is holding the building of the lots. Anyway, they keep taking out money from an ATM as cash to distribute to the 5 partners since the first of the year. I have listed each partner as a vendor partner equity. how would you go about tracking that per partner? and any time they do that in the future(which they will not do any more).

@ferdinandthebull 5 лет назад

Hi Seth, great explanation! I thought this is what I was looking for put I'm a little stuck with what I would like to do :) I'm in Australia and using an old copy of MYOB to track my private finance with my partner. We recently bought a house and would like to track the equity each is putting into the house using one offset account. All our savings going into the offset account which will be tracking each our contribution as equity and the total of this should reflect our back account balance. However some expenses will be shared, like the loan payments, food, etc and will come out of both our equity and some expenses, like my car for, example, would be my responsibility and reduces only my equity. I still would like to use the reconcile account feature to make sure there are no mistakes made. Is there a simple solution or will I have to make a 'double-double' entry, one for the expense and one to account for the equity? Hope this makes sense.

@AbslutZr 6 лет назад

Can I set up weekly member contributions for my S-Corp if I don't have all the startup money needed to get going?

@nerdenterprises 10 лет назад

You book the personal charges as a Shareholder Distribution. Use an Equity account that is specific to the shareholder so you can see how much he has withdrawn from the company.

@donttread5414 3 года назад

Can you do a video on credit cards, how transactions are done whether the card is personal (in your name / ssn) and if the card is business (business name /ein) and how to reconcile transactions on the cards, and if the card is paid off with personal funds (and what happens) and if the card is paid off with LLC funds instead (and what happens), and how to reconcile these payments on the card statments

@nerdenterprises 3 года назад

I have a course that covers this and a lot more. new.nerdenterprises.com/bulletproof

@DavidSaquing 11 лет назад

is it ok to put the staples transaction directly in shareholder contribution instead of creating petty cash and balancing the at the end of the month? thanks.

@donttread5414 3 года назад

I have a complicated scenario where I have a personal card (in my name) that I use in my business. I am cash basis LLC. I intially paid it off with personal funds. I then ceased doing this learning it was not best practice, and started having the LLC pay the card off. I am trying to figure out how to expense all these charges. Because its a personal card (in my name) would all charges not be DR expense CR equity? How do the payments reconcile when for example I overpay the card with personal funds or business funds? Should I track these as liabilities?

@Dracos2112 11 лет назад

Thanks, hours of hair ripping avoided!

@glendasierra6800 6 лет назад

I'm very concern, my accountant has an emergency and she would no be able to continue working with me. I spoke with a new accountant and she told me to change capital contribution from equity to liability otherwise I have to pay taxes over the withdrawals, is that correct?

@nerdenterprises 11 лет назад

Thanks I am not sure what you are referring to here? Unless you are talking about a purchase for re-sale then you really can just book the whole total including sales tax to the appropriate expense account. If it is a purchase for re-sale then you want to split the transaction and post the sales tax portion to Sales Tax Payable.

@nerdenterprises 10 лет назад

I'm assuming (s)he wants the investment into the business in the LT Liab, and the ST Liab would be for subsequent loans made. You can do it this way, but it tells a different story. Treating it as a "loan" means I intend for it to be paid back. Putting it in Equity means it's an investment that may or may not be.

@dianaesp6050 11 лет назад

Thanks, I've learned a lot from your videos. My question is why you don't record the transaccion for the tax paid in the purchase? I know I shoud do it but how?

@2868hotrod 10 лет назад

Great video! I have a question about shareholder's contributions and petty cash. If I create a petty cash account, does that mean only cash transactions can be entered which were paid by owner. What if some of the transactions were made by owner's debit card. Anotherwards, does it have to petty cash only?

@shahzadsyedshah770 6 лет назад

Sir please tell me if i share net profit to partners who should i deal in quickbooks ? which is appropriate methods i dont want to show in drawings accounts need your help on urgent bases or if you have any video then share me the link. thanks

@marlenepisani2665 11 лет назад

Thanks, so I am thinking the easiest way to do receipts is to enter thru a write cheque in the petty cash account, expense it out the proper expense account, keeping the journal entries for large contributions and distributions, then do a deposit at the end of each month for the petty cash amount to owners contributions.

@nerdenterprises 11 лет назад

You would have to split the transaction and show the sales taxes paid as a debit to sales tax payable.

@nerdenterprises 10 лет назад

Sounds like someone is trying to use me to get their homework done ;) I give you an A+ - looks like you did it exactly right!

@Elijah12459 8 лет назад

I created a Petty Cash Account for Owner Contributions and Distributions and I'm currently using Quick-books Online Essentials, instead of creating a Check to record these types of transactions can they be recorded under Expense instead ?

@Cyberbronco 10 лет назад

I have a stupid question. When you created your Petty Cash account your "Tax Line Mapping" selection read : B/S Cash. Can you expand on when that means. I don't have that as a selection on my list. Thanks!

@ladonnast 11 лет назад

Thank for you great information. I have 2 questions: 1. Why does the Petty Cash account reflect in Shareholders? In what way are they connected? 2. Instead of the Petty Cash Account, could you just enter transactions in under the Share Holders distributions and track each transaction that way?

@Robin-du6mr 8 лет назад

I need to show a $200 monthly subtraction to the food cost expense account, then put it in the owner distribution account. The owner bought restaurant food and personal food at the same time. I tried a journal entry with debit to food and credit to owner. dist but it didn't work. Can you help? Thank you

@donttread5414 3 года назад

Should a personal card used in my LLC be on the books as a liability account, or should it not be on the balance sheet, and simply have journal transactions from the card as equity? IE: DR expense CR equity? Can either be used?

@nerdenterprises 3 года назад

Watch this video I think it will help you a lot --> ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-XbbbFcVGoTA.html

@aryelalexis2011 8 лет назад

Thank you for this excellent and informative video. I do have one ?. If I have a C corp, I paid out of my own pockets for some expenses like worker's comp insurance, office supplies (Staples) etc. How do I reimburse myself on QB? I need to create a petty cash account (Bank)y? Then Write a check made out to Worker's comp and Staples out of my petty cash? Lastly I need to make a deposit under owner's contribution? Are these the right steps? Thanks a million.

@angelhodgdon1127 8 лет назад

You should check out the QuickBooks Online Community Support at community.intuit.com/quickbooks-online Lots of help there. Good Luck.

@nerdenterprises 8 лет назад

Yes. That's the easiest way to record what you've paid for with personal funds, and then close it out to Owner Contributions, so that it all shows up properly on the Balance Sheet.

@DRGMW42 10 лет назад

This is great…except I very much use petty cash ( change for markets/sales etc). What else can one call the out of pocket use of cash for the owner's contribution or draw?

@lsantana323 7 лет назад

Would you set up the equity accounts for an LLC classified as an S-Corp in the same way ?

@nerdenterprises 7 лет назад

Yes. Unless there's a good reason for doing otherwise, I set the accounts up for tax basis accounting. This makes it easier for my clients to get their returns prepared at tax time.

@George-kt6gm 8 лет назад

Thanks Seth, I didnt mean essential details, but asides and digressions... ie: what petty cash was originally, or why someone would pay for company expenses with personal money etc... no disrespect intended !

@nerdenterprises 8 лет назад

+George S (JustPlainMusic) Got it. I think that stuff can be important to give context. When someone just tells me what to do, I don't understand it nearly as well as when I understand the reasons behind the method - especially since there can often be different ways of doing the same thing, and no right or wrong, just different philosophies. Some people will come in and say, "that's not what Petty Cash is used for." After doing this a while I've had the experiences of having people criticize me from every possible angle, so I try to head these things off at the pass, so to speak. I've also learned not to take it personally - in fact, I really appreciate the feedback. It helps me improve the quality of my content, which is something I honestly strive to do every single day.

@jonellen4614 10 лет назад

OK, this is the video I was referencing. I was told by the CPA to enter the initial owner invest as a Long Term Liability account 'Notes Payable, Owner's Name'. And create a Current Liability account 'Advance, owner's name'. This really isn't making sense on how/why to do this. Thoughts? I know you touched on this in the video... but still confused.

@donttread5414 3 года назад

And whats defined as a "personal" card? Whos name is on the card? Even if the card is personal ie: "in my name and SSN", but I use it for business purposes, is it now considered a "business" card and should I now track this on my books? Please explain :) Also subbed, loved your content. You give the the meat and potatoes compared to all the other fluff on youtube.

@nerdenterprises 3 года назад

Yes. If you want your books to be "bulletproof" then you will want any credit cards used for the business to be in the name of the business. Many people do use cards that are in their name personally as their business card. As long as you aren't also using it for personal expenses, then you shouldn't have any issues.

@thesoulkeeper31 6 лет назад

I kind of watched your video 3 (maybe 4) times, not because it is hard to understand but because I wanted to really really know what you're explaining perfectly. All of the sudden I realized what you meant with a journal entry, and I ended up entering those investments from my personal account debiting my Equipment account and crediting my Member Contribution for the same amount. The question I would have is, what do you do when a credit from a personal account has been used and the financing is for 12 months. Do you make deposits to the business account, and make regular monthly payments to that personal credit card as an expense towards whichever account applies to what was purchased?

@nerdenterprises 6 лет назад

If I understand correctly, then I would record it exactly as you described above, except show it as a loan, and record the payments as an offset to that loan. So it just hits a different section of the balance sheet.

@thesoulkeeper31 6 лет назад

Awesome, thank you explaining that.

@frankayala3950 3 года назад

I have been looking for a video tutorial that talks about distributions and contributions. I have taken a position for a realtor company, this company use to out-source my previous employer which was a property management. Funny how I am now working for the client...lol...blessed actually... So my questions is, where do I record a final distribution check? It's a distribution on the property management side, does that mean it's a contribution transaction to record on my end, or am I hitting the distribution GL account as well since it's a final check to close out the account and not conduct business with the property management anymore...any suggestions would help...thank you for the video as well, it helped me understand some aspects of capital GL codes.

@nerdenterprises 3 года назад

This really depends on how the accounting has been handled all along. Normally when I have a client who works with a property management company, we keep a "Bank" account which really represents the monies the property management company are holding "in trust" for us. This is the right way to do it. So when a distribution is made from those funds, on our books it's just a transfer from that bank account to our operating account.

@franciscoterrazas5490 9 лет назад

In an S-corp situation what if the distribution is being taken from company profits and there is not enough in the Contributions section?

@nerdenterprises 9 лет назад

In that case you wind up with negative Equity - the owner / S/H pulled out more than (s)he made. What some people do in this case is re-class the difference to a loan account.

@anjanettemercer4147 2 года назад

Hello, I do love your videos they are very helpful. I do have a question: Timestamp 5:42 on this video shows you putting money from your account into your shareholder contribution account. Currently, my shareholder capital runs a Negative balance. I never put money into that account when I set up Quickbooks and my distributions are larger than my contributions /purchases. However when I do the entry as you show it. I come up with a deposit in my bank account (Now showing more money than I have in the account) Not sure how to fix. Please advise. (PS> my opening balance equity is also negative?)

@nerdenterprises 2 года назад

Hi! You would only enter a deposit into your bank account if you were actually depositing money. And if that money was a contribution from you, the owner, to your business then that's why you would record that deposit to Shareholder Contributions. The distributions account will normally be negative because it represents Equity withdrawn from the business. The contributions account will be positive because it represents money you've put INTO the business. That's why I like laying them out in separate subaccounts - so you can see clearly what you've put in vs taken out, and then the net.

@anjanettemercer4147 2 года назад

@@nerdenterprises Thank you.

@ianmurray3360 4 года назад

I am the owner of a non-profit and I be a contributor and is it a certain amount I can contribute?

@dottiefloyd3553 5 лет назад

What if your draws are with inventory items? How would you track that?

@nerdenterprises 5 лет назад

Hi! If you took inventory for personal use / consumption then just sell it for 0. In other words, post an invoice for the sale, but charge $0.00 for it. That will move it's cost to COGS and get it out of inventory. If you don't want to cost it to the company, then you can record a journal entry - Debit Draws, Credit COGS (After you post that invoice) just for the cost (not what you'd sell it for).

@jo-annebarclay9753 7 лет назад

Let me know if I'm understanding correctly. I often make purchases for the 'business' (I'm a non-profit), where a portion of the purchase is personal and a portion is for the business. Would I set up a Petty Cash account and record the business portion there? At this point I don't ever expect the money to come back to me - I assume then that I would just zero out the Petty Cash amount at month end and show it as "Owner's Contribution'. I need to know how much I put into the business and which category it was disbursed to (i.e. rabbit food, vegetables, etc.) Would it show that when I do the Petty Cash thing? Thanks in advance!

@nerdenterprises 7 лет назад

I would do it the way you're suggesting, yes. Business portion out of Petty cash. I would make a note of the entire purchase amount, and also of the payment method that was used. This way, if you were ever audited, you can produce the documentation needed to support the expense. Bigger picture, especially with a non-profit, I would avoid doing this. There is so much compliance with non-profits, and you don't want to lose that status. Better to keep it clean. Let the non-profit pay for the non-profit expenses. If you need to contribute money, then deposit cash into the non-profit bank account, and record that as a contribution. A little more work, MUCH better way of doing things. You'll sleep better at night, knowing that you're bullet proof under an audit.

@George-kt6gm 8 лет назад

the journal entry method sounds simple compared to the petty cash thing? or am I missing something?

@nerdenterprises 8 лет назад

+George S (JustPlainMusic) A lot of people don't like to do journal entries. Many accountants and bookkeepers don't like letting their clients do them. For my part, they serve their purpose, in certain cases. In other words, the right tool for the right job. The thing to keep in mind is that journal entries have their limitations. You can't touch items, and there are certain reports that won't show them. The petty cash thing makes it easier for many people, and it also gives you the ability to include all of the details that you might want on that transaction.

@ArtisticGurus 10 лет назад

We have a S Corp Business. Our business owes us from shareholder loans. The business made money. And we would like to pay back the money we contributed from the shareholder loans. What is the process to pay ourselves back and not get taxed as income when the business owes us money in a Schedule K1?