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Level 2

Pay off purchases using cash in quick books but it should go to owner's equity account

How can I do reclassification  in quick books if amounts were posted incorrectly. The purchases  bought and  bills paid   were done using amount received from customers. However the amount were paid for by owner. 

Do I now do a journal entry debiting cash and crediting  owners equity.

 

New to Quick book  .

Solved
Best answer July 13, 2020

Best Answers
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QuickBooks Team

Pay off purchases using cash in quick books but it should go to owner's equity account

Hi there, Sheen Solutions,

 

I'm here to help correct the record in QuickBooks Online.

 

Since you've already use cash to clear purchase and bills, you'll want to create a journal entry. Simply credit the funds to the cash account and debit it to the Owner's Equity. Doing this will transfer the funds to the correct posting account.

 

No need to reimburse the amount since you aren't returning the funds.

 

If you mean that the amount posted for the purchases is incorrect, you can edit the entry in QuickBooks. Then, enter the exact amount. If not, I'd appreciate if you can provide more details to your question number 2.

 

Upon sharing this solution, I still suggest consulting your accountant. He/She might have specific instructions on how to manage the entry so you have an accurate record of your books.

 

I've added this article to learn how to record purchases using personal funds: Understanding the Equity Accounts on Your Financial Statements.

 

Stay in touch by commenting below. I'm always right here to help.

View solution in original post

3 Comments
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Moderator

Pay off purchases using cash in quick books but it should go to owner's equity account

You've come to the right place, Sheen Solutions.

 

You'll want to record first the business expenses paid by the owner:

  1. Click + New on the left pane.
  2. Select Journal entry.
  3. On the first line, select the expense account for the purchase.
  4. Enter the purchase amount in the Debits column.
  5. On the second line, select Owner's equity.
  6. Enter the same purchase amount in the Credits column.
  7. Select Save and close.

Then, here's how to reimburse the amount:

  1. Click + New on the left pane.
  2. Select Expense or Add expense.
  3. Select a bank account to use to reimburse the personal funds.
  4. In the category column, select owner's equity.
  5. Enter the amount of the reimbursement.
  6. Select Save and close.

You can check this article for more information: Mixing business and personal funds.

 

Let me know if there's anything else you need.

Highlighted
Level 2

Pay off purchases using cash in quick books but it should go to owner's equity account

Thanks for the information. I am already doing so.

 

(1) What I want to be cleared up  is I mistakenly used cash in quick books  to  clear purchase and bills  but the owner used his personal funds to do so.   I want to reclass the amount  for cash and put it to owners equity. How can this be done in  quick books.

 

(2) Amount  posted to a supplier   for purchases in error  and was cleared by cash in quickbooks.. How can I reverse or delete  same.

 

 

 

Highlighted
QuickBooks Team

Pay off purchases using cash in quick books but it should go to owner's equity account

Hi there, Sheen Solutions,

 

I'm here to help correct the record in QuickBooks Online.

 

Since you've already use cash to clear purchase and bills, you'll want to create a journal entry. Simply credit the funds to the cash account and debit it to the Owner's Equity. Doing this will transfer the funds to the correct posting account.

 

No need to reimburse the amount since you aren't returning the funds.

 

If you mean that the amount posted for the purchases is incorrect, you can edit the entry in QuickBooks. Then, enter the exact amount. If not, I'd appreciate if you can provide more details to your question number 2.

 

Upon sharing this solution, I still suggest consulting your accountant. He/She might have specific instructions on how to manage the entry so you have an accurate record of your books.

 

I've added this article to learn how to record purchases using personal funds: Understanding the Equity Accounts on Your Financial Statements.

 

Stay in touch by commenting below. I'm always right here to help.

View solution in original post