Skip to main content
J
jchang926
November 7, 2018
Question

What Category do I use for Transferring Money to a Personal Checking Account

  • November 7, 2018
  • 1 reply
  • 0 views

My boss sometimes transfers money from his business account to his personal account. How do I categorize that? 

1 reply

Rustler
Rustler
November 7, 2018

If you are taxed as a sole proprietor or partnership[ it is equity draw

For a company taxed as a sole proprietor (schedule C) or partnership (form 1065), I recommend you have the following for owner/partner equity accounts  (one set for each partner if a partnership)

[name] Equity (do not post to this account it is a summing account)
>> Equity
>> Equity Drawing - you record value you take from the business here
>> Equity Investment - record value you put into the business here

 

R
RockyMountain
March 19, 2019

can you walk me through the steps to setup an equity account?

MaryLandT
MaryLandT
March 19, 2019

Good day, @RockyMountain,

 

I'd be glad to walk you through creating an equity account.

 

Make sure you've already set up the owner or partner as a vendor, so you can track the transactions associated with him/her.

 

Here are the steps you can follow:

  1. Click the Gear icon at the top right of the page.
  2. Select Chart of Accounts under Your Company.
  3. Click the New button. 
  4. Select Equity under the Account Type section.
  5. Select Owner's Equity under the Detail Type section.
  6. Enter the Name of the account, then click Save and Close. 

If you need to set up equity accounts for multiple owners, you can read through this article for the detailed steps: How to set up owners or partners.


That's it for now @RockyMountain. If there's anything else you need, don't hesitate to leave a comment below. I'd be here for you.

    Terms & ConditionsAccessibility statement