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Intuit
5 helpful votes

How to pay back to the owner who paid for purchases on behalf of business

There are a few steps to record the pay back to the company’s owner who did some payment on behalf of the company. First, we'll have to create a Current Liability account to track the amount owing to the business owner for incurring expenses on its behalf

  1. Select the Gear icon, then Chart of Accounts and New.
  2. Under the Account Type column, select Current Liabilities. Under the Detail Type column, select Current Liabilities. Under the Name column, type any name which is applicable ie. Payable to Owner.

Select the + New button. Select Expense.

Enter the purchase made. Next, enter the Payable to Owner account with the total purchase amount entered with a negative figure. Done correctly, the amount at the top right should read $0 as no cash has left the business at this point

Select the + New button. Select Transfer.

  1. Under the Transfer Funds From column, enter the name of the bank account used to pay the owner.
  2. Under the Transfer Funds To column, enter the account Payable to Owner.
  3. Under the Currency column, if required, change the currency in which it was paid.
  4. Under the Amount column, enter the amount reimbursed.
  5. Select Save.

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