Mixed Personal and Business accounts

[Andrew Sackville-West]

On Wed, Nov 07, 2007 at 10:59:43PM -0600, AC Marsh wrote:
> I have a small consulting business which is an LLC (me 99%, wife 1%) 
> that gets taxed as a partnership (1065).
> 
> The wizard (before I discovered the power of GnuCash) in Quickbooks Pro 
> 2007 set me up as (roughly translated):
> 
> Equity:Opening Balance
> Equity:Me:Draws
> Equity:Me:Equity
> Equity:Spouse:Draws
> Equity:Spouse:Equity
> Equity:Retained Earnings
> 
> I would think that I might change the names to be:
> 
> Equity:Opening Balance
> Equity:Me:Draws
> Equity:Me:Contributions
> Equity:Spouse:Draws
> Equity:Spouse:Contributions
> Equity:Retained Earnings
> 
> or something similar.


sure you could, but that doesn't change what they are. There are other
ways to get equity besides contributions. And your equity fluctuates
depending on stuff. Consult an accountant.

A
> 
> 
> Andrew Sackville-West wrote:
> > On Wed, Nov 07, 2007 at 10:28:53PM +0000, Karl Grant wrote:
> >> Hi again,
> >>  I'm trying to separate my (very small, side-) business and personal
> >> accounts. Currently they have been together in the one file although the
> >> base accounts (assets / liability etc) are duplicated; My thinking was that
> >> anytime I purchases something for personal use I could enter the transaction
> >> as follow:
> >>
> >> Credit Business Assets:Current Assets:Current AC;
> >> Debit Personal Expenses:Gifts
> >>
> >> Thought that was a good idea until I sat down to work out my taxes and found
> >> that there was no way to track the money in and out of my business!
> >>
> >> I would like your learned opinions on the following before I implement it,
> >> advice, criticism or general mockery accepted :-)
> > 
> > okay... your mother was a hamster and your fa... oh, that was a
> > joke. sorry...
> > 
> >> 1) Separate the business and personal accounts into two separate files
> > 
> > definitely the right move, always.
> > 
> >> 2) Any money spent on personal use, by cheque or credit card, is entered
> >> into a Equity:Drawing account
> > 
> > yup. and it becomes income to you.
> > 
> >> 3) this amount is entered into the personal set of accounts under
> >> Income:FromDrawings and as an Expense in the relevant account
> > 
> > okay.
> > 
> >> 4) Money going the other direction (probably cash) Personal to Business is
> >> entered into a Expense:ForBusiness account (is this right?)
> > 
> > depends on what you want to do with it. If you are investing it in the
> > business, then it is not an expense. THis is where I get fuzzy on it,
> > but it becomes some kind of asset as shares of the company. Might be
> > better to call it a loan. Then the money above, coming back out of the
> > business is a return of principal (and thus not income) until you've
> > paid it all back.
> > 
> >> 5) the same amount is entered into a Equity:Personally Added Capital (any
> >> better names?) and the relevant business expense
> > 
> > only if you're investing the money. If you're loaning it, then it is a
> > liability.
> > 
> >> Sorry if the terminology is a bit all-over-the-place, but I've no formal
> >> experience with accounting.
> > 
> > IANAA
> > 
> > A
> > 
> > 
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