Skip to main content
U
ubforming
May 3, 2023
Question

What type of expense account for repayments to personal accounts

  • May 3, 2023
  • 1 reply
  • 0 views

We recently converted from a sole proprietor to a corporation at the beginning of the year. However, our new corporate business account could not be set up until February so for the month of Jan we were paying expenses for the new corporation out of the old sole proprietor accounts. We paid off the credit card balance and repaid the sole proprietor bank account for all the expenses in a couple of lump sum e-transfers. Now our accountant is telling me that anything I paid to those accounts needs to be set up as an expense and to allocate those payments to the proper expense accounts.

What type of expense account would I need to set up to record these repayment transactions?

1 reply

A
Alex M
May 3, 2023

Hi there ubforming,

 

It's important that all your transactions be entered correctly for your books to be well balanced. QuickBooks Online is a great tool able to help you keep track of expenses and sales so you can see the profit of your business. I can point you in the right direction to know which account type should be used.

 

In order to know which type of expense account you should create for these transactions, I recommend speaking to your accountant. They'll be able to elaborate on which expense account detail type they'd like you to use to correctly represent the money movement in your books. You can invite them to your QuickBooks account if not done already by going to the My Accountant section and entering their info.

 

If you have any other questions, feel free to reach out here.

Terms & ConditionsAccessibility statement