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MTV
Level 2

ATM Withdrawls

Hello

I'm so confused, My son is the owner of  his companying and he withdrawals  from ATM .  I went to chart of accounts and setup Petty Cash account . Is this correct or do I set up account Equity and call it owner draw.

The reason I'm having trouble is because I never know if its for personal or business.

Thank you Lisa V

 

Solved
Best answer May 30, 2020

Best Answers
john-pero
Community Champion

ATM Withdrawls

@MTV  Petty Cash or Cash on Hand is definitely what the ATM withdrawals should first go into.

 

When your son submits receipts for cash purchases,  record them from the cash account. What is left over (or not substantiated by receipts) gets moved to owner draw. 

 

As owner, draw is by definition an advance against end of year pass through profit or loss. 

 

You should create 3 equity accounts,  1 for draw, 1 for contributions and these 2 get rolled into the 3rd, Owner Equity on first day of new year. This let's you track annual movement of funds in and out of equity.  Better still, make all 3 subaccounts of a master parent equity account you never post to but sums all the subs

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7 Comments
MarshallA
Intuit

ATM Withdrawls

Hello,

 

You hit the nail on the head.

 

If this is for his personal money to use, its owners draw.

If its to have cash on hand for business expenses, then its petty cash

 

You NEED to know what that cash is for in order to know where to allocate it.

MTV
Level 2

ATM Withdrawls

I have another question, If my son withdrawals from ATM I transfer funds from Bank account I have set up to owners draw type is equity , that's all I do correct.

Thank MTV

MTV
Level 2

ATM Withdrawls

I have another question so if my son withdrawals from ATM. I would do a transfer from Bank account I have setup to Owner Draw. So does the transfer to Owner Draw just stay there.

Ryan_M
QuickBooks Team

ATM Withdrawls

Hi @MTV,

 

Let me take care of this query for you. 

 

I suggest you let the amount withdrawn to stay in the Owner's Draw account for tracking purposes. When it's time to pay back the withdrawn amount, you simply create a bank deposit to the same bank account. 

 

Additional details of this process can be found in this article: Set up and process an owner's draw account. It lists the steps on how to create an owner's draw account, as well as the steps on how to write a check from an owner's draw account.

 

Please know that you're always welcome to get back here in the Community if you have other questions. I'll be sure to get back to you. 

john-pero
Community Champion

ATM Withdrawls

@MTV  Petty Cash or Cash on Hand is definitely what the ATM withdrawals should first go into.

 

When your son submits receipts for cash purchases,  record them from the cash account. What is left over (or not substantiated by receipts) gets moved to owner draw. 

 

As owner, draw is by definition an advance against end of year pass through profit or loss. 

 

You should create 3 equity accounts,  1 for draw, 1 for contributions and these 2 get rolled into the 3rd, Owner Equity on first day of new year. This let's you track annual movement of funds in and out of equity.  Better still, make all 3 subaccounts of a master parent equity account you never post to but sums all the subs

View solution in original post

Cheeky Green
Level 1

ATM Withdrawls

Man..... haters gon’ hate, no? lol

 

I’m saying, what do we do with the ATM fee surcharges?

 

one love

Ryan_M
QuickBooks Team

ATM Withdrawls

Hi @Cheeky Green,

 

I got your back on this query about ATM surcharges. 

 

You can use the same account where the amount you withdrew was posted. Ensure you include a description for tracking purposes of the surcharge. 

 

I'll leave this article for your reference: Set up a clearing account. It has the steps on how you can set up a clearing account, as well as a list of where you can use a clearing account in QuickBooks Desktop (QBDT). 

 

You can come back any time here in the Community if you have other concerns. Post a reply below, and I'll get back to it. 

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