I have set up the companies investments under the chart of accounts. However, every month I get a small return which they pay directly into the bank account. How do I show this as a return on the investments? Should I be linking this to the chart of accounts, or just putting this through as a deposit? Many thanks
Thank you for getting back to us and providing us with more details about the concern that you're having, @farmgirlkent69.
I can help you with recording your return on investment.
You're right in setting up an equity account from your chart of accounts to track the investment. When recording the investment, you can categorise the transactions using the equity account you've created. Perform this if the bank is connected to your QuickBooks Online (QBO) account.
You can create a cheque to record the return of investment or capital disbursement to yourself, partners or co-owners. Here's how:
Go to the + New button and choose Cheque.
Provide all the necessary information.
Enter the following information in the Category Details section.
First line: The equity account that you've created.
Second Line: Expense account you use to track the interest you pay, and the amount of interest that is part of your payment today.
Other lines: Any additional fees and their appropriate accounts.
Click Save and close once you're done.
If you're paying with a debit or credit card, you can enter an expense. Check this article for more information about adding a cheque or expense in recording this capital disbursement: Record paying back an investment.