I'm a sole member LLC.
I've got an "Owner's Equity" equity account set up and any time I Take money from my pocket and spend it on the company, I log it in this account and categorize it properly for tracking purposes.
When I want to take money from the company, I created an "Owner Draw" equity account. Do I write myself a check and use the "Owner Draw" account? I noticed that if I do that, the draw account goes into a negative balance. I feel like I should not have created a draw account and instead, wrote a check against the "Owner's Equity" account.
Which is correct?
Solved! Go to Solution.
I had the same problem - QB Pro not letting me add a sub account to my 320 Owner Equity Account .....
So I set up a totally separate account with sub-accounts under the Equity portion of my chart of accounts as follows:
310 / Owner Investments
310-1 / Owner Contributions
310-2 / Owner Draws
That way, my accountant can clearly know my intent with respect to my postings.
Hello there, @DnR75040.
I'm here to help provide some details about setting up Owners Equity sub-account in QuickBooks Desktop.
When you create a company, there are specific accounts that QuickBooks creates by default and other special accounts that you can't delete, merge, or set up a sub-account. These accounts are:
What you can do is create another separate Owners Equity account, and from there you can set up a sub-accounts.
For additional reference, you may want to check this article to understand QuickBooks Chart of Accounts.
Please know that you're always welcome to post if you have additional questions about setting up an account. I'll be around to help. Have a good one.