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Level 3

business expense paid with personal funds

Here's what I did:

I transferred $125 from my business checking acct. to my Personal Checking acct. and made a purchase for my business of  $377.00. I know I did it completely backwards and should have transferred the $252.00 from my personal to business to make the transaction but I was stressed out that day lol. 

Can you please tell me how to record the whole mess??

I know from the above it sounds like I'm a complete idiot, but sometimes I'm kind of

dyslexic when under stress

Solved
Best answer February 06, 2019

Best Answers
Highlighted
Level 15

business expense paid with personal funds


@the_tile_setters wrote:

Hi,

Thank you for helping me

I'm not sure how I'm to record the purchase. Write Check?

I'm using Premier Desktop

I'm sorry, could you go through it step by step.

I'd really appreciate it


My apologies, I am so used to these questions being for QBO that I overlooked your desktop tag

 

bring up write checks on the cash type bank account

leave the pay to blank

On the expense tab-

line one - the expense account for what you bought and the amount

line two -  owner equity investment and the same number as a negative

save the zero dollar expense

 

For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), I recommend you have the following for owner/partner equity accounts  (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

 

View solution in original post

9 Comments
Highlighted
Level 15

business expense paid with personal funds

If you are taxed as a sole proprietor or a partnership, code the 125 from business checking as owner equity draw.

 

to record the purchase with personal funds use the plus menu>expense, in the account section

line one, the expense account for what you bought and the amount

line two, owner equity investment and the same number as a negative

save the zero dollar expense

 

 

 

Highlighted
Level 3

business expense paid with personal funds

Hi,

Thank you for helping me

I'm not sure how I'm to record the purchase. Write Check?

I'm using Premier Desktop

I'm sorry, could you go through it step by step.

I'd really appreciate it

Highlighted
QuickBooks Team

business expense paid with personal funds

Hi the_tile_setters,

 

I can guide you to record your transfer and purchase transactions in QuickBooks Desktop using Rustler's instructions.

 

To code the $125, you can write a check using these steps:

  1. From the Banking menu, select Write Checks.
  2. Go to the PAY TO THE ORDER OF section and select your name.
  3. Click the Expenses tab below.
  4. Select the owner's equity account and enter the 125 in the AMOUNT field. Please have this checked with an accountant to make sure you select the right account.
  5. Click Save & Close.

To record the purchase, you can use the Write Check function again. Then, go to the Expenses tab and select the type of accounts mentioned by Rustler above in line 1 and line 2. Then, as always, you can verify the accounts with your accountant.

 

Lastly, I'd recommend entering a memo in these transactions, so the other members of your business can easily identify them.

 

If you have other questions, you can always go back to this thread.

Highlighted
Level 15

business expense paid with personal funds


@the_tile_setters wrote:

Hi,

Thank you for helping me

I'm not sure how I'm to record the purchase. Write Check?

I'm using Premier Desktop

I'm sorry, could you go through it step by step.

I'd really appreciate it


My apologies, I am so used to these questions being for QBO that I overlooked your desktop tag

 

bring up write checks on the cash type bank account

leave the pay to blank

On the expense tab-

line one - the expense account for what you bought and the amount

line two -  owner equity investment and the same number as a negative

save the zero dollar expense

 

For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), I recommend you have the following for owner/partner equity accounts  (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

 

View solution in original post

Highlighted
Level 3

business expense paid with personal funds

As a single member LLC, are you recommending I have the following?:

 

"Opening Balance Equity"

"Equity"

"Owners Equity"

"Owners Draw"

 

As in your post:

"[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here"

 

Is the account "Opening Balance Equity", which is already in the chart of accounts, a summing account which should not be posted to?

 

Highlighted
Level 3

business expense paid with personal funds

Was just checking in for any replies to this thread.

I entered in my expenses which I paid for with personal funds, as described above, the expense account/amount of item and then underneath each, a negative for the same amount from owners equity investment. I am assuming, that to record my transactions where I was reimbursing myself by transferring funds to my personal account, I can just record these as owners draw? or is there a way to link them to the purchases I recorded, described above? Thank you!! I so appreciate your time

Highlighted
QuickBooks Team

business expense paid with personal funds

Thank you for joining the thread, @quinn1.

 

The check that you’ve created will show as a positive amount on your Equity Investment. To show that you had transferred money to your personal account, you can create a check and under the expense account select the Equity Investment or the equity drawing.

 

You can follow the steps provided by JessT on how to write checks. See this article for detailed guidance: Create, modify, and print checks.

 

Please let me know if you still have follow-up questions about recording your transactions by leaving a comment below. I'm always here to assist. Take care and enjoy the rest of the week.

Highlighted
Level 1

business expense paid with personal funds

Please advise! Ive recorded a few expenses with personal money and created two lines as advised, one as a positive under the correct expense account and one as a negative under owners investment netting the full transaction to zero. The issue I am having now is when I try and pull up that expense report, which was to pay a specific vendor, his report is showing zero. The only way to pull up this information is when I go to transaction by vendor report. But I need to give this vendor a 1099 at the end of the year and it is not showing that he was paid the amount because it just shows the netted zero from the transaction. Help and thanks!

Highlighted
QuickBooks Team

business expense paid with personal funds

Thanks for joining on this thread, @Amiracd.

 

There is a possibility that the vendor thresholds are set to zero and the account used is incorrect. That's why the amount shows $0.00 in the report.

 

Let's make sure that you've used 1099 Accounts on the expenses to show the amount in 1099 forms. 

 

Here's how to check: 

 

  1. Go to the Vendors, then choose the Vendor Center
  2. Double click the vendor's name. 
  3. Hit the transaction and check if it's under the 1099 account. 

Once verified, go back to the Transaction Lists by Customer and re-check if the amount is already correct. 

 

Please refer to the steps below to check the threshold setup.

 

  1. Go to Edit at the top
  2. Choose Preferences from the drop-down option.
  3. Select Tax:1099 from the left panel and go to Company Preferences.
  4. Select the click here link under If you want to map your accounts to boxes on Form 1099-MISC.
  5. Click the Show IRS 1099-MISC filing thresholds link on the Map vendor payment accounts window.

Review the 1099 boxes and their appropriate threshold. You can override it by double clicking the threshold columns. For more details, check out this article: Prepare and file 1099s with QuickBooks Desktop.

 

I've attached an article on how to fix issues in the 1099 E-file in QBDT. 

 

 

Let me know if you have follow-up questions. I'm always here to help. Take good care!

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