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A
arkvalleyinfo
February 6, 2019
Question

How can I record owners contributions and distributions in quickbook online?

  • February 6, 2019
  • 2 replies
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2 replies

Rustler
Rustler
February 6, 2019

distributions are associated with an s-corp election - is the company taxed as an s-corp?

 

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

 

    L
    lewisexpress
    March 18, 2019

    What you do you mean by summing account?

    john-pero
    john-pero
    March 19, 2019
    @lewisexpress wrote:

    What you do you mean by summing account?

     

    A summing account is a parent account that is not posted to but contains child or sub accounts that are posted to. The total current value of each child account will be reflected in the total of the parent/summing account.  

    U
    userkassandra-torres
    September 8, 2021

    Follow up question -

    We recently started paying owner distributions. We have 1 parent company with 3 subs. Two of the three subs sent the parent company a distribution as it is part owner. How would the receipt of the distribution be booked at the parent? I booked the distribution paid at the sub level to the respective equity account. However I don't feel that the receipt should go to equity. I also don't think that dividend income is appropriate. Is there another account maybe I'm missing?

    L
    lblackman38
    November 19, 2021

    question where do i even report or set up owners draw 

    R
    ReymondO
    November 19, 2021

    Good day, @lblackman38.

     

    An owner's draw is a draw method used when a sole proprietor or partner in a partnership takes company money for personal use. In order to track this on QuickBooks, you have to create an equity account. That way, the program can trace the withdrawals of the company's assets when paying yourself. Here's how:

     

    1. Click the Gear icon at the top, and select Chart of Accounts.
    2. In the Chart of Accounts window, click New.
    3. From the Account Type drop-down list, choose Equity.
    4. Choose Owner’s Equity from the Detail Type drop-down list. 
    5. Enter an opening balance.
    6. Click Save and Close.

     

    Once done, you can create a check and use the owner's equity account to record the payment.
     

    1. Click + New and select Check.
    2. Choose the bank account where your money will be withdrawn.
    3. Select Print later if you want to print the check.
    4. Fill in the check fields. In the Account field, be sure to select the Owner's equity account you created. 
    5. Click Save and Close. 

     

    For the detailed steps, you can check out this article: Set up and pay an owner's draw.

     

    All of the transactions you've created using this account will be posted in your account's register. If you need to review your data, simply run an Account Quick Report. Just go to the Accounting menu and select Chart of Accounts. Then, look for the Owner's equity account and click the drop-down list under the ACTION column. Finally, choose Run report to check your account. 

     

    And if you want more details, you can customize reports to focus on specific accounts or filter for specific things.

     

    In case you have further questions or concerns, please click the Reply button and write them down. I'll be here if you need further assistance. Have a good one!

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