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Level 2

Owners Equity question

Hello. I’m starting to enter items for my husbands business. He mostly used his personal cards up until July so I have entered all purchases he paid for under an owners equity account. My question is how do you document the GST paid on those purchase? Right now I have the sub totals debited under purchase account and credited to owners equity account. Do I do the same for the GST in the same journal entry? 

3 Comments
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QuickBooks Team

Owners Equity question

Hello there, amandamanastersk,

 

Accurately accounting for transactions that used personal cards is key when it comes to managing a set of books and I want to make sure you have the information you need to handle these correctly. I'll steer you in the right direction for how you can take care of these transactions in QuickBooks Online.

 

Generally speaking, it's best to avoid the mixing of business and personal funds, but I know that it happens sometimes. For those instances, we have a few articles that can direct you on how to log them in your books to ensure the numbers are lining up. Check them out below.

I recommend using the method outlined in the second article for the transactions where your husband used his business card. If that is what you've done and you need an extra hand with the taxes or you'd prefer to stick to the method you've used, I recommend speaking with an accountant to learn the best way to handle this situation. They'll know if and how you should apply the taxes for these purchases.

 

The My Accountant tab in the program can help you with this. Found in the left menu, this tab gives you the opportunity to invite your accountant on as a user or to use the Find a pro to help button if you don't already have an accountant. This will link you to our database of QuickBooks-certified accountants.

 

Take care and enjoy your weekend!

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Level 2

Owners Equity question

Thank you so much for the response.  I have created an Owners Equity account for the purchases. I have debited the amount under "purchases" and placed the credit under the owners equity account I created.  How do I document the GST. Do i debit it to GST in the COA and credit it to the same owners equity account I created? I need it to pull on the GST reports..again I am so clueless :( I have placed a picture for reference to show what i have started to do...but it could be completely incorrect. 

Highlighted
QuickBooks Team

Owners Equity question

I know these situations can be tricky, so it's okay to not have all the answers. The key here is knowing where to reach out to find them. Again, an accountant is going to be a great asset here as they'll know the best method for recording the taxes related to this situation.

 

Generally speaking, when recording journal entries in QuickBooks Online, the taxes need to be added as a separate line so that they can be properly mapped to the tax centre, which is something an accountant can help with. In addition to that, they'll be able to let you know if you even need to do that. Check out the end of my original response to you to see how you can connect with an accountant using QuickBooks Online.

 

 I hope that helps clarify the situation.