cancel
Showing results for 
Search instead for 
Did you mean: 
Experienced Member

How to record Cash withdrawals used for business expenses?

I decided to withdraw $1,000 from my bank account on 9/18 and I only used $800 for business expenses. I deposited $200 back into my account on 9/25.

 

I am having difficulties recording these transactions to quickbooks. 

 

Here is what I have:

 

9/15  ($1,000) withdraw: $800 Expense account & $200 loan payable account (current liability). 

9/25 +$200 deposit: Accounts Receivable. 

 

I know this is not right because the $200 were not really a loan. I just did not know how to record it.  Any help is much appreciated. 

 

Thank you

Solved
Best answer 09-27-2017

Accepted Solutions
ProAdvisor

Re: How to record Cash withdrawals used for business expenses?

Let's make this very easy to understand for you.

 

1) Open Petty Cash account (under Bank Type in the Chart of Accounts)
2) Transfer money from bank account to Petty Cash account. This means you've $1,000 balance in Petty Cash and $1,000 less in bank account
3) You've used $800 from Petty Cash for some items. Expense it from Petty Cash A/C. Now, you've $200 left in this account.
4) Deposit $200 back to the Bank account from Petty Cash. Now, you've ZERO balance left in Petty Cash account.

 

Hope this helps!

Highlighted
ProAdvisor

Re: How to record Cash withdrawals used for business expenses?

@intermextrans

 

I have the two transactions on my banking waiting to be recognized:

 

1. 9/18 = -$1,000 ATM withdrawal

2. 9/25 = +$200 Deposit

 

1) Open new Petty Cash Account

2 ) Click "+" create button at the top right corner > Choose "Transfer" Under Other. 

     Transfer $1,000 from bank account to new petty cash account

3) Click "+"  create button again. This time select "Expense" under Vendors to expense $800 purchase items. Be sure to select petty cash account (2nd field on screen). This will reduce balance from $1,000 to $200.

4) Click "+"  create button again. Choose "Transfer" Under Other. Transfer $200 from petty cash account to new bank account. This will bring petty cash account balance to zero.

5) Go back to bank feed "For Review" section. You should see MATCH green icon for both of your transactions ($1000 withdrawal and $200 deposit). Click MATCH sign. Clicking MATCH icon will not add new transactions. It will just match already recorded transactions from #2 and #4.

 

If you could just follow these steps, it should work fine. Cheers!

4 Comments
ProAdvisor

Re: How to record Cash withdrawals used for business expenses?

Let's make this very easy to understand for you.

 

1) Open Petty Cash account (under Bank Type in the Chart of Accounts)
2) Transfer money from bank account to Petty Cash account. This means you've $1,000 balance in Petty Cash and $1,000 less in bank account
3) You've used $800 from Petty Cash for some items. Expense it from Petty Cash A/C. Now, you've $200 left in this account.
4) Deposit $200 back to the Bank account from Petty Cash. Now, you've ZERO balance left in Petty Cash account.

 

Hope this helps!

Experienced Member

Re: How to record Cash withdrawals used for business expenses?

Thank you for taking the time to help me on this. 

 

I have the two transactions on my banking waiting to be recognized:

 

1. 9/18 = -$1,000 ATM withdrawal

2. 9/25 = +$200 Deposit

 

Would you recommend me to exclude them and then follow the steps you just mentioned?

I was hoping to somehow categorize the two transaction to the right chart of accounts from the banking section, but I am certainly open to other suggestions. 

 

If not, I can certainly go your recommended route. 

Thank you,

Highlighted
ProAdvisor

Re: How to record Cash withdrawals used for business expenses?

@intermextrans

 

I have the two transactions on my banking waiting to be recognized:

 

1. 9/18 = -$1,000 ATM withdrawal

2. 9/25 = +$200 Deposit

 

1) Open new Petty Cash Account

2 ) Click "+" create button at the top right corner > Choose "Transfer" Under Other. 

     Transfer $1,000 from bank account to new petty cash account

3) Click "+"  create button again. This time select "Expense" under Vendors to expense $800 purchase items. Be sure to select petty cash account (2nd field on screen). This will reduce balance from $1,000 to $200.

4) Click "+"  create button again. Choose "Transfer" Under Other. Transfer $200 from petty cash account to new bank account. This will bring petty cash account balance to zero.

5) Go back to bank feed "For Review" section. You should see MATCH green icon for both of your transactions ($1000 withdrawal and $200 deposit). Click MATCH sign. Clicking MATCH icon will not add new transactions. It will just match already recorded transactions from #2 and #4.

 

If you could just follow these steps, it should work fine. Cheers!

Experienced Member

Re: How to record Cash withdrawals used for business expenses?

 

@vpcontroller It worked!!! Thank you so much!!!!!!