Accounting for customer payments through personal checking

Ian Pilcher arequipeno at gmail.com
Thu Apr 24 14:15:24 EDT 2014


On 04/24/2014 06:41 AM, Brian wrote:
> I use a free online service that allows customers to pay with their debit
> card, but this service is linked to my personal checking account. As I get
> money in my personal checking through this service, I will periodically
> initiate a transfer to my business checking, but it is not an immediate
> transfer. How do I account for this in my business books, without making it
> look like I'm just contributing endless amounts of my own money to the
> business (i.e. through an Owner Contributions equity account)?

When you receive the payment ...

On the business side, you will debit (increase) a receivable and credit
(increase) income.  On the personal side, you will debit (increase) your
checking balance and credit (increase) a payable.

When you transfer the funds ...

On the business side, you debit (increase) your business checking
balance and credit (reduce) the receivable.  On the personal side, you
debit (reduce) the payable and credit (reduce) your checking balance.

-- 
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Ian Pilcher                                         arequipeno at gmail.com
           Sent from the cloud -- where it's already tomorrow
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