Thank you David. Perfect answer.
Fran3
On Sunday, October 20, 2019, 11:45:00 PM EDT, David Cousens
<[email protected]> wrote:
In the personal accounts if you have expended money on items for the business
it creates a Liability for the business and in your personal accounts by
expending money from your bank you are creating an asset. You would record
a purchase as follows
Personal
Asset:PersonalBankAccount Cr xxx
Asset:Reimbursable Dr xxx
in the Business account, the purchase would appear as
Liability:Reimbursements Cr xxx
Expenses:... Dr xxx
When you transfer money from your business bank account to your personal
bank account to
reimburse yourself in the Buisness accounts it appears as
Asset: BusinessBankAccount Cr xxx
Liability:Reimbursements Dr xxx
and in your personal accounts
Asset:PersonalBankAccount Db xxx
Asset:Reimbursable Cr xxx
You would put notes in the description and/or memo section in each to make
it clear that it was a purchase of an item for the business from your
personal account in the first case and reimbursement of that in the second
to keep the tax man happy. (The reverse if you expend business funds on a
personal item.)
David Cousens
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David Cousens
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