Bills paid by partner, entered incorrectly.
07/05/09 12:58pm PDT, Viewed by asker 10/12/09 10:07am PDT
Total Views: 461
One partner in LLC paid some bills out of personal account, both prior to and after a checking account was established. In setting up QB, I entered the bills through Enter Bills/Pay Bills and showed them coming from the checking account. That gave the checking account a negative balance. So, I entered an owner's equity investment into the checking account. It has now occurred to me that I won't be able to get the checkbook to balance. In looking at other answers to similar question, I've decided I should have shown it as a sub-account of the Owner's Equity Account,and paid the bills out of that account. But, can you show bills paid out of an equity account? If you can do that, how do I correct the entries already made? I'm not very far in, and would like to figure out how to correct it before I enter anything on the actual checking account. Very simple answers, please. I'm not an accountant and my computer knowledge isn't much better.
Helpful Answer
First, back up the data file. Then, delete the bills/payments, etc. that you've entered. Then, you can enter a journal entry (Company>Make General Journal Entry) to record the amounts paid and post it to the Owner Equity account (or Due to Owner Liability account if it will be repaid).
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Michelle L. Long, CPA, MBA
Author of the book "Successful QuickBooks Consulting: The Comprehensive Guide to Starting and Growing a QuickBooks Consulting Business"
National Trainer for Intuit Trainer/Writer Network
Advanced Certified QuickBooks ProAdvisor
Author of the book "Successful QuickBooks Consulting" http://tinyurl.com/yke8ndr
http://www.LongforSuccess.com
Linkedin Group: http://bit.ly/9e3RB
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Answer
First, back up the data file. Then, delete the bills/payments, etc. that you've entered. Then, you can enter a journal entry (Company>Make General Journal Entry) to record the amounts paid and post it to the Owner Equity account (or Due to Owner Liability account if it will be repaid).
PLEASE mark this answer as solved (click the button under the answer in the lower, right corner) or post additional questions. Thanks so much!!!
Michelle L. Long, CPA, MBA
Author of the book "Successful QuickBooks Consulting: The Comprehensive Guide to Starting and Growing a QuickBooks Consulting Business"
National Trainer for Intuit Trainer/Writer Network
Advanced Certified QuickBooks ProAdvisor
Author of the book "Successful QuickBooks Consulting" http://tinyurl.com/yke8ndr
http://www.LongforSuccess.com
Linkedin Group: http://bit.ly/9e3RB
Facebook Page: http://bit.ly/1q72VW
Answer
If you are not that far in I would delete the bills and checks that paid them. I would then do the following journal entry (you are going to use the same expense accounts that you used for the bills)
Credit Owners Equity and debit the expense accounts. In the memo section I would make the following notation - to record bills paid from owners personal account.
Hope this helps
PLEASE mark this answer as solved (click the button under the answer in the lower, right corner) or post additional questions. Thanks so much!!!
Answer
Jheerman -- the poster has already recorded the expense -- the problem is between the checking account vs. owner's equity. Your method would double the expense and not correct the problem. They could record a journal entry to
Debit checking
Credit owner's equity
Or the menthod I mentioned earlier--whichever is easiest.
PLEASE mark this answer as solved (click the button under the answer in the lower, right corner) or post additional questions. Thanks so much!!!
Michelle L. Long, CPA, MBA
Author of the book "Successful QuickBooks Consulting: The Comprehensive Guide to Starting and Growing a QuickBooks Consulting Business"
National Trainer for Intuit Trainer/Writer Network
Advanced Certified QuickBooks ProAdvisor
Author of the book "Successful QuickBooks Consulting" http://tinyurl.com/yke8ndr
http://www.LongforSuccess.com
Linkedin Group: http://bit.ly/9e3RB
Facebook Page: http://bit.ly/1q72VW
