I have a new partnership and just set up QB 2009. I need to enter payments (web site monthly fee, partnership filing fees, DBA ad, etc.) made before opening our bank account. How do I record this cash out as a business expense if I didn't pay it out of the company bank account? Also, how do I separate these payments by partner for income tax purposes, since our partnership is a pass-through business?
Thanks!
Bryan
Bryan,
For entering the "Equity" payments made by the owners to get the business running, use a Company - Journal entry form.
Debit the expense account
Credit an Owner's Drawing (Equity type) with Subaccounts for each owner.
Please mark this answer as solved or post additional questions. Thanks so much!!!
Laura Madeira
Author of "QuickBooks 2009 Solutions Guide for Business Owners and Accountants"
National Trainer for Intuit Accountant Trainer/Writer Network
Visit my profile at:
OK, but can you step back a bit for me, since I just set up my company tonight and this is my first attempt at QB (although I've been a Quicken user)? All I see when I open up QB is the 'Home' screen with "Enter Bills" and "Pay Bills" icons. I entered the expenses into the Enter Bills part, then when I tried to "Pay Bills" it wanted a bank account to pay from. That's where I got stuck. So you're saying that instead of paying from a bank account, you pay from an Equity account (one for each partner) instead? Will that allow me to track individual expenses at the end of the tax year so we can report these against our income? Sorry for simple questions... I know accounting well enough, but just need to figure out how to do it in Quickbooks.
Thanks!
Actually, nevermind... I figured it out. So, now I have the money paid for 'startup costs' in the various expense accounts and in our respective Owner Draw accounts (as a credit balance). I assume that eventually, when company disbursements are made to the owners, this will balance out the credit in the Owner Draw accounts? Or is the Draw account supposed to be a credit account, and the Disbursements is the offsetting debit account?
Man, its been too long since my accounting class in college! :-)
Thanks!
