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ATM Withdrawls

Forum|Forum|6 years ago
May 30, 2020
3 replies
4 views

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

QuickBooks Desktop

Best answer by john-pero

@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

M

mazar

Level 6

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.

M

MTVAuthor

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

R

Ryan_M

Moderator

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I suggest you let the amount withdrawn to stay in the Owner's Draw account for tracking purposes. When it's time to pay back the withdrawn amount, you simply create a bank deposit to the same bank account.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

Level 12

@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

C

Cheeky Green

Man..... haters gon’ hate, no? lol

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

one love

R

Ryan_M

Moderator

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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