Small business - takings by owner and taxes.

[Wouter van Marle]

On Wed, 2006-04-19 at 01:26 -0400, Derek Atkins wrote:
> You misunderstand me.  This is just a reduction in equity.  It
> has no bearing on Income or Expense.

OK fine, but now I've a seriously negative equity. I don't think that's
so much the idea either. Account tree (part):
- Equity (initial investment minus takings)
- Bank account (bank)
- Expenses

Now I make transfer from bank to equity. And then the equity of the
company goes negative, as the capital takings decrease the equity. Is
that sound? Or do I have to channel profits back to equity?

What is the meaning of "equity" really, anyway? (I'm not a native
English and certainly not a bookkeeper).

Wouter.

> 
> -derek
> 
> Quoting Wouter van Marle <wouter at squirrel-systems.com>:
> 
> > On Wed, 2006-04-19 at 01:14 -0400, Derek Atkins wrote:
> >> Checking -> Expenses:Capital Withdrawal
> >
> > The problem in this is that capital withdrawal is not an expense. It
> > should not be deducted from the profits before tax.
> > Or do I misunderstand you?
> >
> > Wouter.
> >
> >>
> >> -derek
> >>
> >> Quoting Wouter van Marle <wouter at squirrel-systems.com>:
> >>
> >> > Hi all,
> >> >
> >> > As small business owner, I want to take some of the profits now and then
> >> > for own use. In accounting terms, this is not a salary (as what I pay to
> >> > my employee - this I can book directly as an expense), though it is
> >> > taken out of (usually) the bank account of the business, but it is not
> >> > an expense.
> >> >
> >> > How to book these transactions properly?
> >> >
> >> > Then I've a small issue with last year's tax. The 2005/06 tax year has
> >> > just ended (the fiscal year starts on 1/4); but I only just got the tax
> >> > payable over the '04/05 tax year. That should be an expense for the
> >> > previous year, however the payment will be done in this year of course.
> >> > Any easy way to correctly do this?
> >> >
> >> > Wouter.
> >> >
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> >>
> >>
> >
> >
> 
> 
>