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JayPortland
April 14, 2021
Question

Long Term Liability - are those credits or debits? Positive or negative numbers?

  • April 14, 2021
  • 1 reply
  • 0 views

I was looking at my balance sheet earlier this week and I noticed something that was weird.  Please allow me to explain.

 

I, the owner of my LLC, loaned some funding to my small business.  I have it recorded as a long term liability because I don't know when it can be paid back, if ever.  So, when I look at my balance sheet, it shows that I have a long term liability but the number is positive.  It almost makes my company look like its in a way better financial situation than it is.

Anyone have any tips on this?

1 reply

G
Giovann_G
April 15, 2021

Thanks for reaching out to us, JayPortland.

 

I'm here to share some information about the Long Term liability account.

 

That's correct. The loan amount should be a credit to the liability account. This way, it will appear on the balance sheet report that you owe something. Then, you can create a cheque when you're ready to pay. 

 

Here's how:

 

1. Click on the + New icon.

2. Select Cheque.

3. Add a cheque number if you plan to send an actual cheque. If you use direct withdrawal or an ETF, enter Debit or ETF in the Cheque # field.

4. Choose the liability account for the loan from the Category dropdown. Then enter the payment amount.

5. Hit Save and close.

 

Check out these popular custom reports if you want to track your expenses and revenue.

 

Feel free to drop a comment if you have further questions related to the liability account. I'm always here to help you. Enjoy the rest of your day!

 

 

 

 

 

 

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