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How to record money paid back to the owner for business purchases

SOLVEDby QuickBooksUpdated 1 year 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:

  1. Select the Gear icon, then Chart of accounts and New.
  2. From the Account Type dropdown, select Current liabilities.
  3. From the Detail Type dropdown, select Other current liabilities.
  4. In the Name field, type a relevant name such as 'Payable to owner'.
  5. Select Save and close.

Step 2:

  1. Select + New. Select Expense.
  2. Select the Payee.
  3. From the Category dropdown, select the account Payable to owner.
  4. 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.
  5. Select Save and close.

Step 3:

Step 3 (when you have paid back the amount):

  1. Select + New. Select Transfer.
  2. From the Transfer Funds From dropdown, select the name of the bank account used to pay the owner.
  3. From the Transfer Funds To dropdown, select the account Payable to owner.
  4. From the Currency dropdown, if required, change the currency in which it was paid.
  5. In the Transfer Amount field, enter the amount reimbursed.
  6. Select Save and close.

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