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Join nowThanks for providing a lot of details, @pml2269487.
Allow me to give you some insight into Expenses in QuickBooks Online.
Expenses are considered assets that are resources owned by your business. If you don't expect repayment any time soon, you can consider using our other account detail options, such as Cash on hand, Checking, Money Market, Rents Held in Trust, Savings, and Trust account. These are types of accounts that fall under banking for expenses (see screenshot below). However, the reason that there's not an Owner's Equity selection is that Expenses usually don't have assets with debts or other liabilities attached to them.
I'm only a reply away if you need any more clarification or have any other questions. Wishing you continued business success now and in the future.
Hi, Anna,
Thanks for the quick response. I thought Expenses were any bills I paid, such as rent, utilities, vendors, etc. If those are not Expenses, then where should I record them? I don't consider this money lost to be an asset. :) In fact, some of my expenses provide zero added value to my business at all and are incurred because something went wrong.
Hey there, @pml2269487.
Yes, bill payments are considered expenses. However, there's no option to use an owner's equity account when paying bills or recording expenses as previously shared by Anna in the first reply.
Although, there's an option to create a journal entry to use an owner's equity to pay for expenses using a personal account. However, we recommend reaching out to your accountant before doing so to make sure these transactions are recorded properly.
To record business expenses you made with personal funds in QuickBooks Online, you can follow these steps:
If you decide you reimburse the money, you can proceed to step 2 provided in this article: How to record the reimbursement as a check/expense.
That's it! Please let me know if there's anything else I can do to be of assistance. Wishing you and your business continued success in all that you do.
Hello, Reymond,
Thank you for the response. I understand most of your instructions. The only part I'm confused about is step #2. What is the expense account for the purchase? I paid the contract with cash from my wallet that was originally withdrawn from my personal checking account, not my business account. I'm not looking to get reimbursed anytime soon. Without owner equity, my business would fail. I'm trying to keep it going until someday it can make a profit.
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