Due to/Due from accounts.

Sniperk2018 · ‎January 23, 2019

Hi all.

Im have a question about due to/due from accounts. Say I have two companies, A and B, and now A gives B 500$ so how do I record the transaction in two Quick Books accounts?

For A: banking, transfer funds, from [A checking account], to [Due from B]

For B: banking, transfer funds, from[Due to A], to [B checking account]

Here's my thinking:

Since $500 is leaving A and going into B, so the transfer must be coming FROM [A checking] and going INTO [B checking] . And the rest is all about due to/due from. Since due to account is a liability, and due from is an asset, then due to should be assigned to B as B is the company that's borrowing the money, that means due from is A's.

Anyone can be so kind and explain this for me please? thanks

john-pero · ‎January 23, 2019

In Company A record check as Due From B (asset)

In Company B record deposit as Due To A (liabilty)

If you have both bank accounts in each if the two companies you can record transfers as they happen but will have to adjust the non company account in each to zero by year end with a check and deposit as appropriate (or a journal entry as last resort)

Sniperk2018 · ‎January 23, 2019

sorry i don't quite follow. could you please be more detailed. much much appreciated!

qbteachmt · ‎January 24, 2019

If you have two companies and run them each as a Sole Proprietorship, there is no such thing as Debt or Loan between yourself and your own entities.

Ask your own CPA what is Permitted under the tax regulations that apply. No one here can tell you if this is Equity Draw and Contribution, or Shareholder Loan and Payable by the Shareholder, or between two separate Entities that are Corporations.

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Due to/Due from accounts.