Dale-Arcadian
Level 1
‎March 05, 2024 11:01 PM

Business Expenses with Personal Funds

Hello,

I am curious regarding how to properly do this in Quickbooks. I purchased material and supplies needed to build my product to sell and it was with my personal money at the time and was done in 2023. I have already entered everything in my Journal with the debit charge amount but curious on a few things and then on the same journal credit it and put as owners equity

1. Would I put supplies and material used to create my product as cost of goods sold or as an expense? 

2. With doing a reimbursement, do I put it as a check or expense? 

3. Should I consider this all as start up costs?

 

Thanks,

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Rainflurry
Level 15
‎March 06, 2024 05:23 AM

Other questions

@Dale-Arcadian 

 

"1. Would I put supplies and material used to create my product as cost of goods sold or as an expense?"

Neither.  The supplies and materials used to create your product are inventory (asset).  They are an expense only when sold to your customer and then recorded as COGS.

 

"2. With doing a reimbursement, do I put it as a check or expense?"

You can use either a Check or Expense transaction.  The Expense transaction in QBO is poorly named IMO because it can be used for transactions other than expenses, as is the case here.  Just make sure to assign the appropriate equity account to the transaction.  That works fine unless your business is something other than a sole proprietorship/single-member LLC or 100%-owned S-Corp.

 

"3. Should I consider this all as start up costs?"

See #1.  

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