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

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

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.

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?

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

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.

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!

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. 

• 1099 E-File: QuickBooks Desktop setup, troubleshooting, & FAQs

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

Hi there I am having a similar issue but the business is not a sole proprietor / partnership (it is an incorporated business that has only 1 owner/shareholder).

There are a few business-related expenses that were paid for from person account (before business account was created). I have entered the expenses and have put them into a cash on hand/petty account.

Should the business simply e-transfer the money back to the person (the owner who paid it) then it could be categorized as part of the bank account rather than a 'cash on hand' account?

Hi sieraaamp!

Thanks for joining us here. Let me show you how to properly record these transactions.

It's best to use a journal entry to record the business expense using personal funds. You can follow these steps:

1. Go to the Company menu and select Make General Journal Entries.
2. Select the appropriate expense account in the first Account column.
3. In the Debit column, type in the amount of the transaction. You can select the customer from the Name drop-down.
4. Choose Owner’s Equity or Owner Investment in the second Account column.
5. Tap Save and Close.

Once done, let's create a check for reimbursement. Here's how:

1. From the Banking, click Write Checks.
2. Select the business bank account in the BANK ACCOUNT field.
3. Enter the necessary details. Go to the Expenses tab and enter the Partner's equity or Owner's equity in the ACCOUNT column.
4. Enter the amount you want to reimburse.
5. Tap Save & Close.

In addition, you may check this link: How to Record Expenses Paid by the Owner's Personal Funds. This will show you how to record a payment to a business credit card using personal funds.

Need more help? Leave a message below and we'll respond as soon as we can.

Howdy, can you group the reimbursements into one check or does each transaction/journal entry need a separate check written?  Thanks

Thanks for reaching out to us, MC777.

Yes, it's possible. If the transactions were made on the same day, you can combine them into one check. If the dates are different, make or process a separate check. This ensures that your transactions in QuickBooks Desktop are properly recorded.

Check out the following articles below for more details in recording those transactions:

• Create a journal entry in QuickBooks Desktop for Windows or Mac

• Create, modify, and print checks

In addition, we recommend that you reconcile your accounts every month to ensure that the balance in QuickBooks matches the balance in your bank and credit card statements. Please refer to this resource for the complete guide: Reconcile an account in QuickBooks Desktop

You're always welcome to add any details below if you have further questions in recording transactions. We're always here to back you up.