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mackeinstitute
Level 2

Add past expenses to owner's equity

Before our business was started, my partner paid for a lot of different expenses herself. We have receipts and want to account for those expenses by adding them to her equity account. However, when creating an expense, quickbooks requires the account from which the expense was paid to be added in the expenses section.

 

In order to credit these expenses to owner's equity, is this a process I can take?

 

1) Create an owner's contribution (debit cash and credit owner's equity) on the day of the expense.

2) Create an expense (debit the expense and credit cash)

 

This seems a bit round about, but does it work?

Solved
Best answer October 26, 2021

Best Answers
Rustler
Level 15

Add past expenses to owner's equity

Yes that works

though I prefer to create a cash type bank account called owners and use that as the payment source.  I just feel that in the event of an audit it makes things clearer

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1 Comment 1
Rustler
Level 15

Add past expenses to owner's equity

Yes that works

though I prefer to create a cash type bank account called owners and use that as the payment source.  I just feel that in the event of an audit it makes things clearer

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