Multiple books

[Andrew Sackville-West]

Ian Leonard wrote:
> 
> Not being an accountant, I am struggling for the correct terminology 
> here, but I have two 'books' my small business accounts and my personal 
> accounts. I don't want to keep a full set of personal accounts but there 
> are a number of things that are common between the two, for example 
> transfers of money and splitting of phone bills.

Are you using two or more checking accounts? If you are using only 1 
then you'll have to maintain one set of books with a chart of accounts 
that includes both business and personal accounts.
> 
> What's the correct way to do this? 

your accountant will tell you to maintain two sets of books if you can. 
see above.

If I set up a different file for
> each, can I transfer between the two? 

Don't know, probably not.

Can I set up another set of
> accounts in my business for this purpose?

What I do, as one of my businesses has some mixed transactions is the 
following.

1) I maintain totally separate accounts for business and personal. In 
fact my personal books are maintained by a commercial product that I 
can't convince my wife to ditch ;P

2) When I have a bill that is split between personal and business, I 
make two entries -- one in my personal accounts and one in my business 
accounts.

3) when I pay the bill, I write two checks. one from my personal account 
and one from my business account.

4) salary payments to me are an expense of the business (its a us corp.) 
of the business and are income in the personal accounts. profit payments 
(woo hoo!) are an equity item in the business (Equity:Owner's 
Capital:draw) and income in the personal accounts.

This all requires lots of data entry (though I've automated some of it), 
but is the "right" way for me. hth

Andrew

> 
> Thanks.
>