Should the subaccounts of partners equity accounts be accumulated adjustment "detail type" equity accounts or partner's distribution/contributions equity accounts?

CCV1 · ‎October 19, 2018

I am setting up an LLC with 3 partners. I created 3 partners' equity accounts (capital accounts) with two subaccounts each (equity accounts) one for contributions and one for distributions. Should the subaccounts be accumulated adjustments or distributions and contributions equity accounts on the "detail type" field? if they should be d and c accounts should they still be subaccounts of the partners' equity account?

Rustler · ‎October 19, 2018

@ CCV

In QB when you create a sub account, the parent account becomes a summing account and you do not post to it, if you do post to it, then on the balance sheet you will the account name-Other with a balance, very strange to look at

so the equity account structure if you are using sub accounts, should look like

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

And as John says at year end after all tax time adjustments are made you move (roll up) the balance using journal entries and clear drawing and investment to equity, as well as the partners portion of retained earnings

View solution in original post

Rustler · ‎October 19, 2018

@ CCV

In QB when you create a sub account, the parent account becomes a summing account and you do not post to it, if you do post to it, then on the balance sheet you will the account name-Other with a balance, very strange to look at

so the equity account structure if you are using sub accounts, should look like

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

And as John says at year end after all tax time adjustments are made you move (roll up) the balance using journal entries and clear drawing and investment to equity, as well as the partners portion of retained earnings

john-pero · ‎October 19, 2018

Keep them as sub accounts, as such they affect the capital accounts. They are d and c and should be emptied into the parent capital account at same time, year end, when profit or loss is distributed to the capital accounts.

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Should the subaccounts of partners equity accounts be accumulated adjustment "detail type" equity accounts or partner's distribution/contributions equity accounts?