With business bookkeeping and basic tax tips for new and old entrepenuers

Thursday, July 29, 2010

Occasional Expenses on a Credit Card

Now if you normally don’t use a credit card for business purposes and just do this occasionally, then you probably don’t need to set up an account on your books for your credit card. Simply use the Owner/Equity Withdrawals account to track an occasional use of the credit card for business. For example, you buy some office supplies at Office Depot and use your personal credit card. Instead of having the credit card set up on your books you make an entry the same as if it were a cash expense, debit office expense and credit Owner Equity or Owner Investments.

Next, how do I record checks?

By Alamo Bookkeeping Associates

Tuesday, July 20, 2010

Personal Expenses on the Credit Card

If you are also using a credit card for personal expenses and business expenses, then you will need to make an entry showing equity withdrawals for any personal purchases. Let’s say you used the credit card to buy some clothes at TJ Maxx. The account you would assigned to this is Owner or Equity Withdrawals. You want to record these transactions even though they are not for the business so that you can keep a correct balance payable on the card. Now when you make a payment on the credit card, you will debit the Bank X Credit Card account, and credit the Bank Account used.

Next, how do I show an occasional business expense if I use my personal credit card?

By Alamo Bookkeeping Associates