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How to record money paid back to the owner for business purchases
by Intuit• Updated 2 months ago
There are a few steps to record money paid back to the company’s owner when they've made a payment on behalf of the company. First, we'll have to create a Current Liability account to track the amount they're owed.
Step 1:
- Select the Gear icon, then Chart of accounts and New.
- From the Account Type dropdown, select Current liabilities.
- From the Detail Type dropdown, select Other current liabilities.
- In the Name field, type a relevant name such as 'Payable to owner'.
- Select Save and close.
Step 2:
- Select + New. Select Expense.
- Select the Payee.
- From the Category dropdown, select the account Payable to owner.
- In the Amount field, enter the total purchase amount as a negative figure.
Note: When done correctly, the amount at the top right should read A$0, as no cash has left the business at this point. - Select Save and close.
Step 3:
- Select + New. Select Transfer.
- From the Transfer Funds From dropdown, select the name of the bank account used to pay the owner.
- From the Transfer Funds To dropdown, select the account Payable to owner.
- From the Currency dropdown, if required, change the currency in which it was paid.
- In the Transfer Amount field, enter the amount reimbursed.
- Select Save and close.
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