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A
Ann249
September 24, 2021
Question

Is this Journal Entry to offset a shareholder loan with a salary correct?

  • September 24, 2021
  • 1 reply
  • 0 views

I have a question. The owner of the company takes money out of the business occasionally for his personal needs and often do deposit some back . At the end of the financial year, i offset the Shareholder's loan account and if the account has a debit balance I post an accrual until the owner pays it back.

Dr. Salary (Expense) account

Cr. Shareholder's loan accrual account (Liability)

 

So if the owner does not pay the money back to the company I include that as an income on his tax receipt. But what journal entry would I be posting to remove the liability from the Accrual account?

 

1 reply

J
JamesM4
September 24, 2021

Hello Ann249,

 

Welcome to the Community. QuickBooks Desktop is a powerful program that simplifies the way you manage your transactions. I'll be glad to point you in the right direction so you can get the resolution you need in a timely manner. 

 

Making sure you're recording your transactions properly is an essential step for maintaining clean books. Based on what you've described, I'd recommend reaching out to an accounting professional for expert advice on how to record the transactions. If you're not in contact with a professional, don't worry, you can search for one using this link here.

 

I'll also leave this question open in the Community so other accountant users can share their advice. Otherwise, feel free to ask other questions, I've got your back.

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