I'm using QuickBooks Pro 2007. I need to account for a deposit of personal funds into the business account.

Question

$400 dollars of personal funds were deposited into a business account. How is that properly accounted for in Quickbooks in the business account? Thanks

Answer 1

First, you can not comingle personal and business money in a business. It really messes up the books. There is no proper way to account for the money.

If that is not the case, and you are giving money to the business you can do it one of two ways - you can invest it in the business or loan it to the business. Investing you would book it to your Equity account (you need to do a journal entry, debit Cash, credit your Equity account), loaning it you would book it to Liabilities (debit cash, credit loans payable).

Answer 2

Assuming that you are a sole proprieter.

Create an Equity account called  "Owners Equity"  for the deposit,  it will show on your end of year reports that the owner put money into the busiess

Answer 3

That's funny -- this happened at my place a couple of months ago. Make the physical correction at the bank, where the personal funds are returned to their rightful owner. That should clear it up for when you reconcile later by appearing as a bank correction, unless the timing is such that's it's going to break over two months/statements.

If it did, open the General Journal and debit the business bank account the amount of the cheque. Type in the explanatory memo and select the relevant name (probably the name of the bank account). Then credit your GL Clearing or GL account for the same amount with the same memo and name as above.

When the next bank statement comes in short of the same amount, move it back onto the bank account by debiting GL and crediting the bank account.