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AbodeSN
Level 1

Multi-member LLC draw accounting

I am managing a multi-member LLC with two members. I have set up equity accounts for myself and my partner with sub-accounts for draw, equity, and contributions.

 

What I don't understand are the actual entries I will make to these accounts to properly account for the first draw we will be taking from the company next month. I also want the company to pay the partners back for some initial contributions and don't understand what entry or entries to make for that either. I cannot find any resources specific to multi-member LLCs. 

 

Any help would be greatly appreciated!

2 Comments 2
gayatriluthfias20
Level 7

Multi-member LLC draw accounting

Hi @AbodeSN , dr draw cr cash. End accounting period after having the report, you could zero the draw amount, dr owner's equity cr draw (also per owner). Comment back, cheers.

AbodeSN
Level 1

Multi-member LLC draw accounting

We might have to dumb that down a bit for me.

 

I have seen the term "cash account" thrown around but I don't know how to put one in the chart of accounts.

 

But so I can see if I understand, I need a cash account. Then I credit Cash, debit the appropriate draw accounts. Does the cash account just represent the total amount of money drawn out of the business from all partners?

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