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jorielle
Level 1

How to record cash transfer as payment to a long term petty cash loan?

Good day everyone!

 

So, here is the situation. 

 

I recently started using QB to help my bosses with their books. The problem is I have 0 experience/background in being an accountant or a bookkeeper. My bosses also just started cleaning up their books which is a big mess btw.

 

So what is the situation?

 

There are points over the last 3 years where the business is not bringing in enough money to pay bills and contractors. So the boss' wife would transfer money to the business to pay everyone and keep the business afloat. These transfers are now recorded as a petty cash loan under shart of accounts.

 

There have been instances when the boss would transfer money to her as payment and/or withdraw cash to give to her.

 

How do I record such transactions in QB? There are journal entries already to reflect the said transactions but I need help categorizing everything.

 

Thank you!

 

1 Comment 1
Jovychris_A
Moderator

How to record cash transfer as payment to a long term petty cash loan?

I can help you record a cash transfer as payment to a long term liability loan, @jorielle.

 

You can record the transfer payment by creating a check. Then account to the Petty Cash loan from the chart of accounts.

 

Here's how:

  1. Click + New and then select Check.
  2. Add a check number if you plan to send an actual check. If you use direct withdrawal or an ETF, enter Debit or ETF in the Check # field.
  3. Under Category details, select the liability account (Petty Cash loan) from the Category drop-down.
  4. Click Save and close.

 

You can reference this article for more details about the loan recording process: Set up a loan in Quickbooks Online.

 

To account for the inflow of cash from the owner, it will depend on how you record them. I'd suggest consulting an accountant on how to categorize them specifically in accounting for the amounts.

 

If you have other questions in mind about recording loan transactions, feel free to place a comment here. I'll be around to help you. Take care and have a great weekend!

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