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Level 1

How do I categorize expenses paid from personal accounts when starting a new business?

Started a new e-commerce business but have been paying for inventory, research, expenses from personal credit cards and personal savings account. What "type" and "name" of account should I use so I can later reimburse myself? Currently I have the personal credit card as type "credit card" and the personal savings as type "Bank". But I don't think this reflects that this is money that the company owes me back. And if I have chosen the incorrect type or name, how do I change them?
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Best answer December 10, 2018

Best Answers
Level 8

How do I categorize expenses paid from personal accounts when starting a new business?

4 Comments
Level 8

How do I categorize expenses paid from personal accounts when starting a new business?

Level 1

How do I categorize expenses paid from personal accounts when starting a new business?

Is there an updated version of this article? The information is EXACTLY what i'm looking for but it's from 2011 so QB has changed quite a bit since then and I want to make sure the info is still relevant!
Level 1

How do I categorize expenses paid from personal accounts when starting a new business?

I would set up a liability account like "Loan from Owner". Each transaction will be to debit the appropriate expense account and debit the Loans From Owner account. When you repay yourself, you will write a check  from the checking account and credit the loan account. The loan account uses terms like Increase and Decrease to make it easier.
Level 1

How do I categorize expenses paid from personal accounts when starting a new business?

I like this idea of creating a liability account for 'Loan from Owner'. When creating the Chart of Accounts what is the best option to choose?

 

Account Type: Non-current liabilities/Notes Payable or Current liabilities/Loan Payable?

 

For the unpaid balance, do i leave this blank since I'm not sure how much I will end up spending from my personal account?

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