Need help with accounting concept
andrew at farwestbilliards.com
Thu Jan 26 12:46:06 EST 2006
On Thu, 26 Jan 2006 12:13:38 -0500
Jim Lynch <jimlynch1 at gmail.com> wrote:
> I have a small business (very small!) that I'm using gnucash to do the
> accounting for. I have a couple of expenses that I'm paying out of my
> personal account that I want to charge off as a business expense, such as a
> portion of my phone bill and cell bills. I don't necessarily want to pay
> myself for that expense, but I do want to show the charges in gnucash
> somehow so the P&L and other reports will reflect actual business expenses.
> Since this is a double entry system, I need some kind of an account
> (liability?) to post the other half of the transaction to. What's a
> reasonable way to do that? I know I'll have to have expense accounts set up
> for phone and cell expenses, but the other side is what I don't understand
> since there won't be any actual exchange of funds.
talk to your accountant, but here's how I do it.
A bill paid by me personally on behalf of the business is essentially a capital contribution to the company so...
Equity:Owner:Capital Contribution 25.00
this increases my capital contributions over time.
A bill paid by me personally gets charged to an owner's payables account and future profit payments to me first go to satisfy that payable...
then later at payout time (woo hoo!)
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