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If an owner purchased the company's printer using their own money for the business in 2018. Later in the year, the printer was returned back so the owner got a refund back for the printer in 2019.
Journal entry so far is as follow for 2018:
Debit Office Expense
Credit: Owner's contribution
My question is does the owner needs to put the refund from the printer back into the business checking account. Or should the owner just keep the refund for his own personal checking account? Should I just do a journal entry to reverse the return of the printer in 2019.
Debit: Owner's contribution
Credit: Office Expense
Thank you for your help.
When the owner purchased the printer, that is owner equity investment, and either an expense or an asset depending on how you entered the transaction.
The printer was returned - the refund either credits a credit card, or is a deposit in the bank
Whether the owner takes money from the business is a choice and if done it posts to owner equity drawing. it has nothing to do with the previous actions.
Why are you using journal entries? QB is not designed that way. Journal entries should be the exception when using QB, they often do not work as you think they should, and when you use inventory type items they never work for inventory. It is much better to use the forms on the home page the way QB is designed to be used. Journal entries also bypass accrual/cash reporting, and will not show on many reports.
For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), I recommend you have the following for owner/partner equity accounts (one set for each partner if a partnership)
[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here
Hi,
Thank you for your response.
Okay. I understand that the printer is the owner's equity investment, and an expense or an asset depending on how I entered the transaction.
However, the owner returned the printer and the refund was credited back to the owner's personal credit card. How do I reflect in QB that the printer is no longer part of the business?
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